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partners in Century Industries and each should be treated as
owning a 50-percent interest. Respondent asserts that, until
1987, the other purported partners’ interests in Century
Industries were shams, as the ostensible partnership between them
and Kanter and Weisgal existed only to shift income Kanter and
Weisgal earned, i.e., the fees paid to Century Industries, to
their family trusts--the other purported partners.
Respondent further maintains the Court has subject matter
jurisdiction over the 1983, 1984, and 1986 adjustments to
Kanter’s taxable income from Century Industries because the only
persons to be recognized as Century Industries partners for tax
purposes are Kanter and Weisgal, and, therefore, the partnership
is a small partnership specifically excepted from the TEFRA
partnership provisions.
B. TEFRA Partnership Provisions
The TEFRA provisions generally are applicable to specified
partnerships and other entities filing partnership returns for
taxable years beginning after September 4, 1982. TEFRA sec.
407(a)(1), (3), 96 Stat. 670. The TEFRA provisions were designed
to provide unified administrative and judicial procedures for the
determination and review of partnership items. A “partnership
item” is defined to include, among other things, the
partnership’s aggregate and each partner’s share of items of
income, gain, loss, deduction, or credit of the partnership.
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