- 22 -
supports its plain reading. In its report underlying the
amendment adding the parenthetical text to section
6230(a)(2)(A)(i), the House Committee on Ways and Means explained
that it had proposed the amendment because
Many penalties are based upon the conduct of the
taxpayer. With respect to partnerships, the relevant
conduct often occurs at the partnership level. In
addition, applying penalties at the partner level
through the deficiency procedures following the
conclusion of the unified proceeding at the partnership
level increases the administrative burden on the IRS
and can significantly increase the Tax Court’s
inventory. [H. Rept. 105-148, at 594 (1997), 1997-4
C.B. (Vol. 1) 319, 916.15]
The House committee report goes on to explain that the proposed
amendment “provides that the partnership-level proceeding is to
include a determination of the applicability of penalties at the
partnership level. However, the provision allows partners to
raise any partner-level defenses in a refund forum.” Id.
Given the enactment of the amendment, we conclude that the
deficiency procedures no longer apply to the assessment of any
partnership-item penalty determined at the partnership level,
regardless of whether further partner-level determinations are
required. The Secretary in interpreting the amendment has
15 The Senate Finance Committee stated similarly in its
report. See S. Rept. 105-33, at 261 (1997), 1997-4 C.B. (Vol. 2)
1067, 1341; see also H. Conf. Rept. 105-220, at 685 (1997),
1997-4 C.B. (Vol. 2) 1457, 2155 (stating that “The Senate
amendment is the same as the House bill” and that “The conference
agreement follows the House bill and the Senate amendment, with
technical modifications”).
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: November 10, 2007