-10-
The standards for judging the Commissioner’s decision to
treat JTA as a TEFRA partnership were set by a pair of cases:
Z-Tron Computer Research & Dev. Program v. Commissioner, 91 T.C.
258, 262 (1988); and Harrell v. Commissioner, 91 T.C. 242, 246-48
(1988). We held in both those cases that the Commissioner should
look only at the partnership return itself to analyze whether a
partnership meets the same-share test. The test is passed if, on
the face of the return, (1) the partnership reported more than
one partnership item for the year, and (2) those items were
allocated to each partner in equal shares. Harrell, 91 T.C. at
246; see sec. 6231(a)(1)(B)(i)(II). We stressed in Harrell that
the Commissioner should not consult sources other than the return
that is in front of his examiner. Harrell, 91 T.C. at 247.
Neither a partner nor the Commissioner can “claim a result other
than that identified in the return and Schedules K-1 as filed and
amended prior to the date of commencement of the partnership
audit.” Id. This bright-line test defeats parties’ later
attempts to secure an undue advantage after the statute of
limitations has run. Id.
A regulation told the Commissioner which items to look at in
applying the test. Sec. 301.6231(a)(1)-1T(a)(3), Temporary
Proced. & Admin. Regs., 52 Fed. Reg. 6779 (Mar. 5, 1987). One of
those items is a partnership “deduction,” sec. 301.6231(a)(3)-1
(a)(1)(i), Proced. & Admin. Regs., and so the Commissioner
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: November 10, 2007