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Where the validity of the underlying tax liability is at
issue, the Court will review the matter de novo. Davis v.
Commissioner, 115 T.C. 35, 39 (2000). Where the taxpayer
challenges the assessment procedures of the case, the Court will
review the matter for abuse of discretion. Sego v. Commissioner,
114 T.C. 604, 610 (2000); Goza v. Commissioner, supra. In order
to prevail under abuse of discretion, a taxpayer must prove that
the Commissioner exercised this discretion arbitrarily,
capriciously, or without sound basis in fact or law. Woodral v.
Commissioner, 112 T.C. 19, 23 (1999).
It is unclear which position petitioner has taken.
Petitioner argues:
The TEFRA jurisdiction did not lie due to non-formation
of the partnership entities according to law, failure
to have a valid * * * [TMP] represent Petitioner within
the scope of TEFRA legislative intent, failure of
Respondent to follow TEFRA procedures in identifying
and selecting a proper * * * [TMP], and failure to
treat Petitioner’s criminal investigation as a
conversion of partnership items to non-partnership
items. The combined effects of these errors caused the
TEFRA assessments to be ineffective as against
Petitioner. * * *
The TEFRA procedures as they relate to the partnerships and
petitioner’s challenge of the TMP’s representation of the
partnerships are discussed below.
Petitioner argues that the decision in Lumenetics v.
Commissioner, T.C. Memo. 1992-630, should be void for lack of
jurisdiction because: (1) The TEFRA audit procedures were
inapplicable to the partnerships because they were improperly
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Last modified: May 25, 2011