Kligfeld Holdings, Kligfeld Corporation, Tax Matters Partner - Page 21

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          items” refers to subsection (d)(1)(A), which discusses “the                 
          partnership items of such partner for the partnership taxable               
          year * * *.”  (Emphasis added.)  Kligfeld claims that this                  
          language supports his reading of the Code’s treatment of partners           
          and partnerships--especially its echo of section 706(a)--as                 
          requiring that any paired FPAA and notice of deficiency must be             
          for the same or overlapping taxable year.                                   
               But Kligfeld focuses on the wrong language within this                 
          section of the Code.  We agree with the Commissioner that the key           
          language in section 6226(d)(1)(B) is that a partner may be a                
          party to the TEFRA procedure for the period within which “any tax           
          attributable to such partnership items” (emphasis added) can be             
          assessed.  A tax that is attributable to a particular partnership           
          item need not be reportable by both the partner and the                     
          partnership in the same taxable year.  For instance, Holdings 2             
          made the basis adjustments to its Inktomi stock--which was a                
          partnership, or at least affected, item--on its 1999 return, but            
          Corporation reported a taxable capital gain on the later sale of            
          the distributed portion of that same stock on its 2000 return.              
          The potential resulting tax was attributable--in the sense of               
          being at least partially dependent on--that basis computation.              
               In addition to focusing on the wrong language, Kligfeld also           
          appears to confuse the assessment of tax with the adjustment of             

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