Larry J. and Sherilyn Wadsworth - Page 12

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          election was to be effective.  Sec. 301.6231(a)(1)-1T(b)(2),                
          Temporary Proced. & Admin. Regs., 52 Fed. Reg. 6790 (Mar. 5,                
          1987).  The statement was required to be identified as an                   
          election under section 6231(a)(1)(B)(ii), to be signed by each              
          person who was a partner at any time during the taxable year to             
          which the return relates, and to be filed at the time and place             
          prescribed for filing the partnership return.  Id.                          
               With the assistance of a return preparer, Mr. Wadsworth                
          filed Forms 1065 for Gold Coast’s tax years 2001 and 2002.  For             
          both years, question 4 of Schedule B, Other Information, read as            
          follows:  “Is this partnership subject to the consolidated audit            
          procedures of sections 6221 through 6233?  If ‘Yes,’ see                    
          Designation of Tax Matters Partner below”.  On both the 2001 and            
          2002 returns, “No” is marked in the “Yes/No” columns adjacent to            
          question 4 of Schedule B.  Below question 4, in the section                 
          entitled “Designation of Tax Matters Partner”, both the 2001 and            
          2002 forms list Mr. Wadsworth as the tax matters partner for the            
          tax years of the returns.  No section 6231(a)(1)(B)(ii) election            
          statement was filed with either the 2001 or the 2002 partnership            
               Petitioners implicitly concede that Gold Coast did not                 
          elect, in conformity with the terms of the temporary regulations,           
          to be subject to the unified partnership procedures of TEFRA.               
          Instead, they argue, inter alia, that the small partnership                 

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