In Uncategorized on 09/15/2021 at 16:27

More than once have I had occasion to proclaim that I will not mourn TEFRA. The separation of partnership-level items from partner-level items from computational items, the scrambling of inside basis and outside basis, the bankruptcy collapse, all provided blogfodder. But they increased my consumption of headache remedies.

Whether the PATH Act protected anyone from tax hikes remains to be seen. One thing it did accomplish was to end such frittatas as we find in Todd D. Graham & Traci R. Graham, Docket No. 22933-19, filed 9/15/21.

T&T petition a SNOD that combines (or perhaps better put, conflates) “adjustments from or related to Superox Holding, LLC, Graham Family Partnership LP, and Firsthird Capital Partners (the ‘Partnerships’).” Order, at p. 1. The said adjustments amount to $162K in one year at issue, and $115K in the other.

Problem is, none of the Partnerships is small by TEFRA standards, as each has a partnership as a partner, thus the fewer-than-ten-partners out is out.

IRS moves to drop the whole partnership story. Looks to me like there never were FPAAs, and maybe so it might could be that SOL has run on those years. Even if no SOL, IRS has a Section 6212(c)(1) one-SNOD-per-tax-year problem.

IRS folds. “The Court does not have jurisdiction in this partner-level proceeding to determine or redetermine the partnership items of the Partnerships for the tax years…. The erroneous inclusion of those partnership items in the notice of deficiency issued to Petitioners does not give the Court jurisdiction to redetermine them.” Order, at p. 2.

But T&T had better keep the Pol Roger Cuvée Winston Churchill in the Eurocave.

“Although the notice of deficiency is invalid to the extent it determines adjustments to taxable income attributable to TEFRA partnership items, the notice of deficiency is valid to the extent it determines adjustments to nonpartnership items. The adjustments to royalty income of $4,019.00 and $2,673.00 for the tax years [at issue], respectively, the related computational adjustments to the self-employment tax and the self-employment tax deduction, and the related penalties and additions to the tax with respect to the nonpartnership items in the notice of deficiency are not related to TEFRA partnership items.” Order, at p. 2.

Judge Emin (“Eminent”) Toro agrees. Since the parties want to put off the trial, he puts them on status report track, so they can fight about the six grand remaining at issue.

I wonder who will mourn TEFRA.


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