OPINION
In this tаx suit, Kenneth C. Keener, William P. Smith and Anne D. Smith (collectively plaintiffs) seek refunds of federal income taxes and interest paid in connection with their investments in various partnerships. At issue on defendant’s motion for partial dismissal of plaintiffs’ complaints is whether this court has jurisdiction, notwithstanding 26 U.S.C. § 7422(h), to entertain plaintiffs’ claims that: (i) Notices of Final Partnership Administrative Adjustments (FPAAs) were untimely filed by the Internal Revenue Service (IRS) and cannot support the tax assessments against them; and (ii) they are entitled to recover interest charged against them for “tax-motivated transactions” pursuant to now-repealed 26 U.S.C. § 6621(c).
I. BACKGROUND
In the early 1980s, American Agri-Corp, Inc. (AMCOR) organized a number of limited partnerships, for which it acted as general partner, and solicited investments from other individuals. Kenneth Keener was a limited partner in Agri Venture II (AVII) during the 1984 tax year, and a limited partner in Agri Venture Fund (AVF) during the 1985 tax year. William Smith was a limited partner in Riehgrove Grape Associates (RGA) during the 1984 tax year, and a limited partner in Desert Highlands Vineyards (DVA) in the 1985 tax year. Each entity reported an ordinary loss deduction in the relevant year, which was apportioned between partners pro rata. Thе taxpayers, each filing jointly with their spouse, reported their proportionate shares of partnership losses on their 1984 and 1985 income tax returns.
In 1991, the IRS sent each of the aforementioned partnerships a FPAA, which stated that the loss deductions reported in 1984 and 1985 were not allowable because each “partnership’s activities constitute^] a series of sham transactions.” Finding no allowable deductions, the agency adjusted the partnerships’ reports accordingly, and assessed each of the partners their respective shares of the unpaid tax and interest. Also in 1991, several partners filed petitions for readjustment in the U.S. Tax Court, contesting the adjustments made in the FPAA. Inter alia, the partners claimed that the FPAA was issued after the applicable period of limitations had expired, and contested the characterization of the partnerships’ activities as “sham transactions.”
On November 4, 2005, and August 14, 2006, defendant filed partial motions to dismiss, contesting the court’s subject matter jurisdiction. On February 21, 2006, plaintiffs filed a motion for partial summary judgment, contending that the section 6621(c) penalty interest was improperly assessed because plaintiffs’ transactions were not shams, or tax-motivated, transactions. Each of these motions has been fully briefed. On November 16, 2006, the court conducted oral argument, but restricted the discussion to issues involving its subject matter jurisdiction.
II. DISCUSSION
Before embarking into the wilds of the TEFRA partnership provisions, one is well-advised to review the contours of the terrain.
A. Statutory Background
“Although they file information returns under section 701 of the Code,” this court has observed, “partnerships, as such, are not subject to federal income taxes. Instead, under section 702 of the Code, they are conduit entities, such that items of partnership income, deductions, credits, and losses are allocated among the partners for inclusion in their respective returns.” Grapevine Imports Ltd. v. United States,
Seeking to remedy this situation, Congress revolutionized the scheme for auditing partnerships in the Tax Equity and Fiscal Responsibility Act of 1982, Pub.L. No. 97-248, 96 Stat. 324, 648-671 (TEFRA). TEFRA “created a single unified procedure for determining the tax treatment of all partnership items at the partnership level, rather than separately at the partner level.” In re Cro-well,
The threshold determination whether, vel non, an item is a “partnership item” governs how the TEFRA procedures apply. The treatment of partnership items is resolved at the partnership level, in a unified partnership proceeding. 26 U.S.C. § 6221; see also id. at §§ 6211(c), 6230(a)(1). While TEFRA defines a “partnership item” in various ways, the concept generally encompasses items “required to be taken into account for the partnership’s taxable year” and those “more appropriately determined at the partnership level than at the partner level.” Id. at § 6231(a)(3).
The term “partnership item” includes the accounting practices and the legal and factual determinations that underlie the determination of the amount, timing and characterization of items of income, credit, gain, loss, deduction, etc.
Nonpartnership items are those items that are not partnership items, 26 U.S.C. § 6231(a)(4), the tax treatment of which is resolved at the individual partner level, using, inter alia, the normal deficiency procedures of the Code. Id. at §§ 6211, 6212, 6230(a)(2); see Crnkovich v. United States,
If the IRS decides to adjust- any “partnership items” reflected on the partnership’s return, it must notify the individual partners of the adjustment through a FPAA. 26 U.S.C. § 6223; Kaplan,
the period for assessing any tax imposed by subtitle A with respect to any person which is attributable to any partnership item (or affected item) for a partnership taxable year shall not expire before the date which is 3 years after the later of—
(1) the date on which the partnership return for such taxable year was filed, or (2) the last day for filing such return for such year (determined without regard to extensions).
Section 6501(a) of the Code provides in pertinent part: “Except as otherwise provided in this section, the amount of any tax imposed by this title shall be assessed within 3 years after the return was filed____” Contrary to plaintiffs’ claims herein, the Federal Circuit recently held that section 6229(a) of the Code unambiguously extends the statute of limitations in section 6501 of the Code for assessing taxes on partnership items. AD Global, LLC ex rel. North Hills Holding, Inc. v. United States,
For ninety days following issuance of an FPAA, the tax matters partner (TMP) has the exclusive right to file a petition for readjustment of the partnership items in the Tax Court, this court, or a United States District Court. 26 U.S.C. § 6226(a); see also Mona-han v. Comm’r of Internal Revenue,
To the extent a partner settles his partnership tax liability with the IRS, the partner no longer participates in the partnership level litigation, and instеad is bound by the terms of the settlement agreement. 26 U.S.C. §§ 6224(c)(1), 6226(d), 6228(a)(4)(B). Partnership items convert to nonpartnership items when the IRS enters into a settlement agreement with the partner with respect to such items. Id. at § 6231(b)(1)(C). If a partner files an action for a refund attributable to partnership items, but those items have been converted through a settlement agreement, the jurisdictional bar of § 7422(h) no longer applies. See Alexander v. United States,
With this brief tour d’horizon, the court now turns to the twin jurisdictional dilemmas posed by defendant’s first dismissal motion.
B. FPAA Limitations Period
Plaintiffs chiefly base their refund claims on the theory that their respective individual statutes of limitations on assessments had run prior to the time the IRS assessed income taxes and interest against them in 1998 and 2001, respectively. To avoid the jurisdictional bar of 26 U.S.C. § 7422(h), they argue that whether section 6229(a) extended their individual limitations periods on assessment found in section 6501 of the Code is not a “partnership item.” In so contending, they stress that the specific timing of the assessment periods under section 6501 is unique to each partner, claiming, as a result, that the assessment periods here are “affected items” that the Tax Court could not have reached in the partnership-level case. Because these issues were not before the Tax Court, they maintain, they could not have been encompassed within the section 6224(c) partnership item settlements. The
Plaintiffs’ argument hinges on several faulty premises, which the court will examine in detail. The first of these is that the limitations issue presented involves either an affected item, or perhaps a nonpartnership item that can be resolved here. In fact, as will be seen, the converse is true — the limitations issue involves either a partnership item or an affected item that cannot be resolved here.
In a well-rehearsed claim, plaintiffs assert that the issues presented do not constitute a partnership item because the provisions at issue, sections 6229(a) and 6501 of the Code, lie in subtitle F of title 26. They note that section 6231(a)(3) defines a partnership item as any item required to be takеn into account for the partnership’s taxable year “under any provision of subtitle A.” But, the latter reference does not, in so many words, prevent a court from treating, as partnership items, legal issues that impact whether the Commissioner’s treatment of partnership items arising under subtitle A will be sustained. Indeed, the relevant Treasury Regulation defines a “partnership item” as including “the legal and factual determinations that underlie the determination of the amount, timing, and characterization of items of income, credit gain, loss, deduction, etc.” Treas. Reg. § 301.6231(a)(3)-1(b). Reflecting the breadth of this definition, issues concerning section 6229 have been held to involve an underlying legal determination within the meaning of this regulation and thus have been treated as partnership items. See Weiner,
One, of course, might reasonably argue that issues involving the interaction of sections 6229 and 6501 are instead “affected items” — parsing the definition under section 6231(a)(5), this interaction could be viewed as giving rise to an item (the section 6501 limitations) “affected by a partnership item” (the 6229(a) extension). See Treas. Reg. § 301.6231(a)(5)-1(a). But, even if true, that does not mean that this court has jurisdiction over this issue. Under the TEFRA partnership rules, affected items essentially have two prongs — one involves a partnership issue, while the second involves a nonpartnership issue, with the latter affecting the former. See Pennell, supra, at ¶20.02[4][e]. It is well-established that the partnership prong of an affected item — in' this case, the proper construction of section 6229(a) — must be determined first in a unified partnership proceeding. The result from that proceeding is then applied at the individual partner level to the extent that it impacts what otherwise is a nonpartnership item — in this ease, the limitations period on assessments. As the Tax Court has repeatedly explained, “because the tax treatment of an ‘affected item’ depends upon the partnership-level determination, affected items generally cannot be tried as part of a partner’s tax case prior to the completion of the partnership-level proceeding’” GAF Corp. & Subs. v. Comm’r of Internal Revenue,
But, what if they do not? What if, for example, the partnership item is not resolved in the partnership-level proceeding or the partner no longer is a party to that proceeding when thе issue is resolved? In such circumstances, the structure of the TEFRA partnership provisions seemingly dictates that a court may not, in a partner-level proceeding, consider a challenge to the partnership prong of an affected item, thus effectively precluding such a court from considering the affected item at all. Certainly, the TEFRA provisions authorize the individual partner to pursue, in the partnership proceeding, the resolution of any partnership issues that might impact his affected items. In this regard, section 6226(c) of the Code entitles a partner to participate fully as a party in the partnership proceeding, presumably allowing such a partner to raise issues that are not raised by the TMP. See Clark,
Whether the court views the interaction of sections 6229(a) and 6501 as involving a partnership item or as an affected item, the result is the same — the court is precluded from considering the statute of limitations issue plaintiffs raise in this partner-level proceeding. This conclusion proceeds from two distinct rationalеs. First, in terms of the
Second, wholly apart from section 7422(h), it appears that plaintiffs have waived their limitations objection. As others of their colleagues apparently did, they could have pursued their statute of limitations defense in the earlier partnership-level proceeding, but, apparently in the interest of obtaining a favorable settlement, chose not to do so.
This court is not the first to reach these conclusions. Far from it. In Chimblo,
A legion of decisions are to similar effect, proceeding either on the basis that section 6229(a) involves a partnership item or that, the failure to raise that section in a partnership-level proceeding resulted in a waiver. See Weiner,
Plaintiffs’ settlement agreements with the IRS do not render the above cases inappo-site. To be sure, as in effect during the years in question, section 6231(b)(1)(C) of the Code converted partnership items into non-partnership items when “the Secretary enters into a settlement agreement with the partner with respect to such items.” Thus, by virtue of a settlement agreement, items previously viewed as partnership items can become individualized, arguably rendering the constraints imposed by section 7422(h) inapplicable. See Slovacek v. United States,
While the field of federal taxation is marked by several “Helvering” doctrines such as “substance over form,” there is, strictly speaking, no “too good to be true” rule. Yet, that is no cause for this court blithely to embrace an absurd result — or to conclude that the IRS or the Congress did so. In terms of the IRS, two provisions in the settlement agreements at issue suggest that any objections concerning the timeliness of the assessments were waived by plaintiffs in exchange for benefits received from the IRS. The agreements thus provide that the taxpayer “offers to waive the restrictions on the assessment and collection of any deficiency attributable to partnership items” and that “no claim for refund or credit based on any change in the treatment of partnership items may be filed or prosecuted.” In the court’s view, the most reasonable reading of these provisions — indeed, the only interpretation that would not render them virtually meaningless — is that plaintiffs, in exchange for being allowed to deduct some of the losses associated with their investments, agreed not to challenge the validity of any assessments resulting from the specified treatment of the partnership items. See Slo-vacek v. United States,
Assuming, arguendo, that the agreements did not settle the limitations issue sub judice, then it would seem to follow that they were ineffective to convert that issue into a non-partnership item for purposes of section 7422(h). Upon close reading, the language of section 6231(b)(1)(C) plainly applies on an item-by-item basis, as it states that the partnership items of a partner shall become non-partnership items as of the date the Secretary enters into a settlement agreement with the partner with respect to “such items.” The last phrаse, of course, would be superfluous if, as plaintiffs intimate, the entry of a settlement agreement as to any partnership item converts every partnership item into a non-partnership item. That the phrase “such items” refers only to those items actually covered by an agreement is confirmed by several other subparagraphs in section 6231(b)(1) that employ the same phraseology. One of these, section 6231(b)(1)(A), provides that partnership items shall become nonpart-nership items as of the date the Secretary mails to such partner a notice that “such items” shall be treated as nonpartnership items. Modifying this provision, section 6231(b)(2)(B)(i) of the Code states that this notice may be provided as to “one or more of such [partnership] items.” Because “such items,” as used in the notice provision of section 6231(b)(1)(A), obviously connotes that less than all the available partnership items need be converted, it is reasonable to assume that the same holds true in section 6231(b)(1)(C), that is, that only those partnership items actually resolved in a settlement agreement are converted to nonpart-
Contrary to plaintiffs’ claims, the court sees nothing in the regulations that existed prior to 1997 to indicate that section 6224(e) settlements had to be comprehensive. Plaintiffs make the latter claim in asserting that the agreements in question necessarily had to convert plaintiffs’ limitation periods to nonpartnership items. But, plaintiffs err in suggesting that any such comprehensiveness was dictated by Treas. Reg. § 301.6224(c)-3T(b) (1987), which states that “[sjettlements shall be comprehensive, that is a settlement may not be limited to selected items.” A careful review reveals that this regulation had nothing to do with the scope of all TEFRA settlements, but rather was designed only to implement the requirement under section 6224(c) of the Code that if the IRS enters into a settlement agreement with any partner, it shall offer any other partner who so requests settlement terms consistent with those contained in the first settlement agreement.’ Placed in its proper context, it is readily apparent that not every TEFRA settlement had to be “comprehensive” under this regulation, but rather only those subsid- . iary agreements entered into based upon the consistency requirement — in other words, the regulation sensibly indicates that to obtain a consistent settlement, the second partner seeking to settle must agree to all the terms that were in the original settlement.
In sum, the settlement agreements here may well present an additional basis for rejecting plaintiffs’ claims, they certainly provide no escape path from the refund suit limits imposed by section 7422(h). Those statutory restrictions require the court to dismiss plaintiffs’ complaints to the extent they raise the sections 6229/6501 limitations issue.
C. Penalty Interest
Defendant next asserts that this court lacks jurisdiction, under section 7422(h), to consider plaintiffs’ claim that the IRS erred in asserting interest against them under former 26 U.S.C. § 6621(c). Between 1984 and 1989, the latter section provided for an increased rate of interest on substantial underpayments of tax attributable to “tax-motivated transactions.”
Section 465(a)(1) operates as a limitation on the loss deductions allowed by other provisions of the Code, stating that “any loss” from an activity covered by the section “shall be allowed only to the extent ... the taxpayer is at risk.” To the extent pertinent here, a “taxpáyer” is considered to be at risk for the amount of cash contributed and for certain amounts borrowed for the activity. 26 U.S.C. § 465(b). Furthermore, a “taxpayer” generally is not at risk for “amounts protected against loss through nonrecourse financing, guarantees, stop loss agreements, or other similar arrangements.” Id. at § 465(b)(4).
The situation is slightly different for transactions found to be tax-motivated because they are shams. There are two predominant “tests” for identifying such shams. The Fourth Circuit has adopted a two-prong standard for disregarding a transaction under the so-called “sham transaction doctrine,” stating that “[t]o treat a transaction as a sham, the court must find that the taxpayer was motivated by no business purposes other than obtaining tax benefits ... and that the transaction has no economic substance because no reasonable possibility of a profit exists.” Rice’s Toyota World Inc. v. Comm’r of Internal Revenue,
So where does this leave us? In fact, the courts have- split on whether issues concerning the imposition of interest under section 6621(c) may be raised in a partner-level proceeding. These eases, in many ways, focus on the reverse of this- issue — whether the particular issues raised regarding the application of section 6621(e), e.g., whether a transaction is a sham, must be resolved in a partnership-level proceeding. In several decisions, the Tax Court has concluded that “section 6621(e) interest is not a ‘partnership item’ and is not within the Court’s scope of review in a partnership level proceeding.” Affiliated Equip. Leasing II v. Comm’r of Internal Revenue,
On the other side of this divide are cases such as River City Ranches,
The nature of the partnerships’ transactions is a “partnership item” then, because it is “required to be taken into account ... under ... [the income tax provisions] of subtitle A,” as affecting the income tax of the individual partners. As a “partnership item,” the character of the partnership’s transactions is within the Tax Court’s scope of review.
Id. at 1144. The Ninth Circuit thus concluded that “[t]he Tax Court erred in holding that it had no jurisdiction to make findings conсerning the character of the partnerships’ transactions, for purposes of. the 26 U.S.C. § 6621 penalty-interest provisions.” Id. Subsequent Tax Court decisions applying River City Ranches, via that court’s so-called Gol-sen rule,
In the court’s view several observations flow from these seemingly conflicting cases. Initially, it is important to emphasize what the Ninth Circuit, in River City Ranches, did not say. It did not characterize the section 6621(c) interest as either a partnership item or an affected item. Indeed, it could not have concluded that the imposition of such interest was purely a partnership item because, inter alia, that interest was imposed only if there was a substantial understatement of-income on the individual return, an issue that obviously cannot be resolved at the partnershiр level. See White v. Comm’r of Internal Revenue,
To be sure, the nature of what needs to be resolved in the partnership proceeding differs depending upon which sort of “tax-motivated transaction” in section 6621(c) is being asserted by the IRS. To the extent heightened interest is being imposed because the partner participated in a partnership that allegedly conducted a sham transaction, the issue whether the transaction, indeed, was a sham must be resolved first in a partnership-level proceeding, before any consideration can be given in a refund action to whether the interest should have been imposed on an individual partner. Apart from the analysis above, this result draws strength from Treas. Reg. § 301.6231(a)(3)-1(b), which states that partnership items include “whether partnership activities have been engaged in with the intent to make a profit for purposes of section 183.” The section 183 inquiry identified in the regulation is very similar to the sham transaction analysis that must be conducted in deciding the partnership prong of the affected item associated with section 6621(c)(3) intеrest. See Gilman v. Comm’r of Internal Revenue,
As in the ease of plaintiffs’ statute of limitations claims, the prerequisite for challenging the imposition of section 6621(c) interest as an affected item has not been met, thereby requiring the court to dismiss plaintiffs’ claim for this interest. Again, this result proceeds directly from section 7422(h), as the imposition of section 6621(c) interest is, in part, “attributable to” partnership items. Here, plaintiffs were on notice that one of the issues pending in the unified partnership proceeding was whether the partnership’s activi
Accordingly, the court concludes that it, as well, lacks jurisdiction over plaintiffs’ claims regarding the imposition of interest under section 6621(c).
III. CONCLUSION
While plaintiffs assert that a ruling that this court lacks jurisdiction to consider their limitations and interest issues would violate due process, the fact of the matter is that plaintiffs “plight” — if that word is appropriate — is a self-inflicted wound.
Based on the foregoing, the court GRANTS defendant’s partial motion for dismissal.
IT IS SO ORDERED.
Notes
. All references here are to the Internal Revenue Code of 1986 (26 C.F.R.), as amended, and in effect during the years at issue.
. Specifically, the Tax Court found that “the foregoing adjustments to partnership income and expenses are attributable to transactions which lacked economic substance, as described in former I.R.C. § 6621(c)(3)(A)(v), so as to result in a substantial distortion of income and expense, as described in I.R.C. § 6621(c)(3)(A)(iv), when computed under the partnership’s cash receipts and disbursement method of accounting.” It further found that "the assessments of any deficiencies in income tax that are attributable to the adjustments to partnership items for the years 1984 and 1985 are not barred by the provisions of I.R.C. § 6629.”
. In relevant part, section 6231(a)(3) states—
(3) Partnership item. — The term "partnership item” means, with respect to a partnership, any item required to be taken into account for the partnership’s taxable year under any provision of subtitle A to the extent regulations prescribed by the Secretary provide that, for purposes of this subtitle, such item is more appropriately determined at the partnership level than at the partner level.
26 U.S.C. § 6231(a)(3).
. Penalties assessed against a partner based on the partner’s tax treatment of partnership items on his individual return are examples of such "affected items.” See Olson v. United States,
. Outlining how its ruling comports with the ■ TEFRA statutory scheme, the Federal Circuit explained—
TEFRA generally requires determination of the tax treatment of partnership items at the partnership level. In the partnership-level administrative proceeding, the IRS may adjust items reported on the partnership tax return which, in turn, would affect the corresponding items on the income tax returns of the individual partners. Each partner receives notice of the beginning of such an administrative proceeding, may participate in the proceeding, and receives notice of the FPAA. This scheme contemplates that adjustments to partnership items are made in one proceeding before assessments are made at the individual partner level. Our interpretation may extend the regular statute of limitations in § 6501(a) for assessments to individual partners, but it does not alter the statutory scheme of determining partnership items in one partnership-level proceeding.
AD Global,
. Other cases are not to the contrary. For example, while several cases talk in terms of penalties being affected items addressed at the individual partner level, Monahan, 321 F.3d at 1066, these cases involve situations in which the partnership items affecting the penalties had already been resolved at the partnership level. See, e.g., Calla-way v. Comm'r of Internal Revenue,
. In this regard, one group of commentators has stated that "[n]o matter who files the petition for readjustment of pаrtnership items for a taxable year, every person who was a partner in the partnership at any time during the taxable year involved and who has an interest in the outcome of the action is a party to the action,” adding that “[t]he court having jurisdiction of the action must allow the person to participate in the action.” Pennell, supra, at H 20.06[2]. Consistent with the statute, such partners are considered full parties in the partnership-level proceedings under both the TEFRA partnership procedural rules adopted by the Tax Court and this court. See RUSTC 245, 247; RCFC, Appendix F, paras. 4, 6. It should be noted that if the TMP does not file a petition to initiate the partnership-level proceeding, the partner may file such a petition. 26 U.S.C. § 6226(b)(1).
. In Monti v. United States,
. If plaintiffs were correct virtually any partnership item could be indirectly considered in a partner-level proceeding. To give but one more example, section 213(a) determines the allowa-bility of medical expenses as a function of the individual’s adjusted gross income, which, of course, would depend upon the partnership distributive share of the partnership income or loss. A case concerning such a medical expense deduction should not provide a vehicle for consideration of the partnership's income or losses. See Callaway,
. Plaintiffs certainly could have raised this issue even if it was not raised by other partners. In this regard, section 6226(c) of the Code indicates that in partnership-level proceedings: "(1) each person who was a partnеr in such partnership at any time during such year shall be treated as a party to such action, and (2) the court having jurisdiction of such action shall allow each such person to participate in the action.”
. See also, e.g., Grapevine Imports,
. See also Clark,
. It is, of course, axiomatic that an interpretation of an agreement "which gives a reasonable meaning to all parts will be preferred to one' which ... achieves a weird and whimsical result.” Arizona v. United States,
. Although plaintiffs do not raise this issue, it should be noted that even if the settlement agreements were not binding of their own force, they became so under principles of equitable estoppel once the IRS could not recoup the benefits conferred upon plaintiffs. See Union Pacific R. Co. v. United States,
. Another common rule of construction holds that identical words in different parts of the same statute are presumed to have the same meaning. Helvering v. Stockholms Enskilda Bank,
. See H.R. Conf. Rep. 97-760 at 609, U.S.Code Cong. & Admin.News 1982, pp. 1191, 1381 (discussing the notice provision and stating that "[t]he Secretary may notify a partner that a partnership item will be treated as a nonpartnership item") (emphasis added); id. at 611, U.S.Code Cong. & Admin.News 1982, p. 1383 (“Neither the Secretary nor the taxpayer will be permitted to raise nonpartnership items in the course of a partnership proceeding nor may partnership items, except to the extent they become nonpartnership items under the rules, be raised in proceedings relating to nonpartnership items of a partner.”). In 1997, Congress modified sections 6229(f)(1) and 6601(c) to deal specifically with situations in which the IRS and a taxpayer entered into a settlement agreement with respect to some, but not all, of the partnership items in dispute for a partnership taxable year. While this provision is ineffective for the years in question, it is notable that, in the 1992 legislative history, Congress clearly thought that current law, dating back to the original TEFRA, anticipated that settlement agreements could be entered into covering some, but not all, partnership items. Thus, in explaining the reason for passing the provision, the accompanying House Report states that—
[w]hen a partial settlement agreement is entered into, the assessment period for the items covered by the agreement may be different than the assessment period for the remaining items. This fractured statute of limitations poses a significant tracking problem for the IRS and necessitates multiple computations of tax with respect to each partner’s invеstment in the partnership for the taxable year.
H.R.Rep. No. 102-631, at 145 (1992); see also H.R.Rep. No. 105-148, at 591 (1997), U.S.Code Cong. & Admin.News 1997, pp. 678, 985.
. The latter point, indeed, was made explicit in temporary regulations issued in 1999. See Treas. Reg. § 301.6224(c)-3T(b) (2001), 64 Fed.Reg. 3837, 3838 (Jan. 26, 1999) (“A consistent settlement agreement must mirror the original settlement and may not be limited to selected items from the original settlement."). This requirement seems logical, as the give-and-take that occurs in resolving multiple items via settlement seemingly would preclude a partner from picking and choosing among settlement terms.
. In rejecting a similar claim, the Fifth Circuit recognized that adopting the taxpayer's position would undercut Congress’ intent in enacting TEFRA, stating in Weiner—
From a practical perspective, a finding of jurisdiction over the statute of limitations issue would create an absurd result that contravenes TEFRA. As was the case here, partners could settle with the IRS and thus eliminate their ability to participate in and be bound by the result of any partnership-level proceeding. But if, as here, the Tax Court decided the substantive statute of limitations issue against the partnership, the settling partners could simply bring individual partner-level suits in the district courts and attempt to obtain a different ruling on the statute of limitations issue. Thus, some partners would be required to pay the assessed deficiency, while others would not. The result advocated by the taxpayers here is at odds with TEFRA’s goal of consolidating decisions that affect the partnership as a whole.
. Upon enactment in 1984, this provision was codified as 26 U.S.C. § 6621(d). It was amended and redesignated as 26 U.S.C. § 6621(c) by the Tax Reform Act of 1986, Pub.L. No. 99-514, 100 Stat. 2744, §§ 1511(c)(1)(A)-(C). Section-6621(c) applies to interest accruing after December 31, 1984, even if the transaction was entered into before the date of its enactment. Tax Reform Act of 1984, § 144(c), Pub.L. No. 98-369, Div. A, July 18, 1984, 98 Stat. 494 (1984). This subsection was among several penalty provisions replaced with a single "accuracy-related” penalty by the 1989 Act. See H.R.Rep. No. 101-247, at 1388-94 (1989), U.S.Code Cong. & Admin.News 1989, p. 1906. Despite its repeal, section 6621(c) remains applicable to tax yeаrs prior to 1989.
. Section 465 was added to the Code in 1976 to combat abuse of tax shelters caused by nonre-course financing, and other situations in which taxpayers were effectively immunized from any realistic possibility of suffering. See S.Rep. No. 94-938, at 47-49 (1976), U.S.Code Cong. & Admin.News 1976, p. 2886; see also Comm’r erf Internal Revenue v. Tufts,
. The Treasury Regulations under section 6231 leave this issue somewhat unresolved in stating that "[t]he application of the at-risk limitation under section 465 to a partner with respect to a loss incurred by a partnership is an affected item to the extent that it is not a partnership item.” Treas. Reg. § 301.6231(a)(5)-1(c).
. See also Winn-Dixie Stores, Inc. v. Comm’r of Internal Revenue,
. In Golsen v. Comm’r of Internal Revenue,
. Various cases have rejected claims that the TEFRA partnership provisions violate due process, holding that those provisions provide appropriate notice and an opportunity to present their objections. See, e.g., Transpac Drilling Venture 1982-12 v. Comm'r of Internal Revenue,
. Based on the foregoing, the court need not address the arguments raised in defendant’s second motion to dismiss.