Our jurisdiction for the instant proceeding is based on the issuance of a notice of of deficiency with respect to nonpartnership items. Notwithstanding the merits of petitioners' res judicata argument, we lack jurisdiction over the Barrister partnership items. Therefore, we will grant respondent's motion to dismiss and strike. Allowing petitioners to challenge the decision in the partnership proceeding in their affected items case would ignore congressional intent that there be a unified, single resolution of partnership items. 2. Due Process Petitioners argue that allowing the assessment of the 1983 and 1984 tax based on the decision in the Barrister partnership proceeding deprives them of their right to procedural due process. Petitioners contend that their interests are adverse to those of the TMP and that the stipulated decision by the TMP denied their right to a trial and to appeal the decision. Our jurisdictional inability to address the tax assessment attributable to partnership items in the context of this deficiency proceeding does not violate petitioners' rights to due process. We have found that the TEFRA partnership provisions generally do not violate taxpayers' rights to due process. See 1983 Western Reserve Oil & Gas Co. v. Commissioner, 95 T.C. 51, 64 (1990), affd. without published opinion 995 F.2d 235 (9th Cir. 1993). As a general rule, a taxpayer possesses a constitutionally cognizable property interest invoked by the assessment and collection of taxes. Accordingly, petitioners must receive an opportunity to present their case. Brinkerhoff-Faris Trust & Sav. Co. v. Hill, 281 U.S. 673 (1930). Although petitioners did not receive notice of settlement, they did receive notice of the entry of the decision in the partnership-level proceeding. Upon entry of the decision, petitioners had 30 days in which to file a motion to vacate that decision. Rule 162. After 30 days, special leave of Court is required to file such a motion. Granting a motion for leave lies within the sound discretion of the Court. Heim v. Commissioner, 872 F.2d 245, 246 (8th Cir. 1989), affg. T.C. Memo. 1987-1. A decision generally becomes final after 90 days unless appealed. Sec. 7481(a)(1). Once a decision of this Court becomes final, we may still vacate the decision, but only in certain narrowly circumscribed situations. Helvering v. Northern Coal Co., 293 U.S. 191 (1934). Petitioners argue that a fraud was committed upon the Court. This Court may vacate a final decision if obtained through fraud upon the Court. Abatti v. Commissioner, 859 F.2d 115, 118 (9th Cir. 1988), affg. 86 T.C. 1319 (1986); Senate Realty Corp. v. Commissioner, 511 F.2d 929, 931 (2d Cir. 1975); Stickler v. Commissioner, 464 F.2d 368, 370 (3d Cir. 1972); Casey v. Commissioner, T.C. Memo. 1992-672. If the Barrister decision is to be vacated, however, it cannot be accomplished in the context of petitioners' affected items proceeding. 3. Is a Separate Deficiency Notice Required As a Prerequisite to Assessment of Partnership Items? Normally, a taxpayer's income tax liability for each year is separate and subject to resolution in a single administrative and/or legal proceeding. In 1982, Congress provided for a separate, unified partnership-level proceeding, thereby creating the possibility that an individual partner may be involved in two or more separate proceedings for any taxable year. Respondent's determinations of partnership and nonpartnership items are subject to differing notice requirements to the partners. Partners receive notices of deficiency for their nonpartnership and/or affected items. At the partnership level, the tax matters partner and notice partners receive an FPAA. The appropriate notice must first be issued before respondent can assess either the partnership or the nonpartnership items. Petitioners here question the separate nature of partnership and partner-level proceedings vis-a-vis respondent's ability to assess a computational adjustment reflecting partnership items without first issuing a notice of deficiency to the partner. In essence, petitioners contend that even though respondent issued an FPAA and a partnership proceeding (in which petitioners participated) was begun and concluded, respondent must issue a separate notice of deficiency to petitioners prior to assessing the partnership items. Courts have repeatedly held that the normal deficiency procedures, including the notice of deficiency, do not apply to the allocation of partnership items among partners. Randell v. United States, 64 F.3d 101, 107 (2d Cir. 1995); Pack v. United States, 992 F.2d 955, 957-958 (9th Cir. 1993); Harris v. Commissioner, 99 T.C. 121, 125 (1992), affd. 16 F.3d 75 (5th Cir. 1994); Sente Inv. Club Partnership v. Commissioner, 95 T.C. 243, 249 (1990). Despite this long line of cases, petitioners argue that a notice of deficiency is required because the partnership provisions do not vest respondent with authority to assess partnership items against the partners upon the conclusion of a partnership proceeding. Thus, respondent must rely on section 6201 for that authority. Petitioners reason that since section 6201(d) refers to the deficiency procedures of subchapter B, respondent must comply with that subchapter for all assessments, including assessments attributable to partnership items. Section 6230(a)(1) provides that, in general, the deficiency notice procedures do not apply to the assessment of computational adjustments. A "computational adjustment" is ** "the change in the tax liability of a partner which properly reflects the [tax] treatment * * of a partnership item". Sec. 6231(a)(6). In short, a computational adjustment reflects the amount of change in the tax liability of a partner that is assessed after a FPAA proceeding becomes final * * * [Palmer v. Commissioner, T.C. Memo. 1992-352, affd. without published opinion 4 F.3d 1000 (11th Cir. 1993).] However, petitioners contend that section 6230(a)(1) should not be read to exempt from the deficiency procedures of subchapter B a computational adjustment reflecting the treatment of partnership items. Petitioners suggest that the term "tax liability” in the definition of computational adjustment refers to the amount due after respondent assesses a deficiency in accordance with subchapter B. Section 6225(a) restricts assessment of a deficiency attributable to a partnership item until completion of the partnership proceedings, while section 6230(a) makes subchapter B procedures inapplicable to that assessment. Thus, contrary to petitioners' argument, section 6201 assessment authority is not limited to assessment under subchapter B procedures. The mere reference to subchapter B in section 6201(d) does not mean that respondent lacks assessment authority as to partnership items unless respondent adheres to subchapter B procedures. Petitioners argue that respondent must comply with section 6213, which requires a notice of deficiency prior to assessment. However, paragraph (3) of section 6213(h) refers to section 6230(a) for the applicability of the notice requirement to deficiencies attributable to partnership items. In addition, section 6216(4) provides: "For procedures relating to partnership items, see subchapter C." Those references belie petitioners' contention that respondent must comply with the deficiency procedures of subchapter B before assessing a computational adjustment. In addition, requiring a notice of deficiency as a predicate for such assessment of partnership items after the conclusion of a partnership proceeding would ignore congressional intent to provide for a separate partnership proceeding. We note that petitioners concede that a notice of deficiency with respect to partnership items would not give taxpayers the right to relitigate the partnership items. In addition, the partnership provisions safeguard due process rights by providing taxpayers with notice of the partnership adjustment and an opportunity to participate in the partnership proceeding. Petitioners' approach would add a procedural step that creates a mere formality and does not provide any additional due process protection. In light of the lengthy list of cases that hold that a notice of deficiency is not required before assessment of a computational adjustment, we find petitioners' argument that such a notice is required unpersuasive. We will deny petitioners' motion to dismiss for lack of jurisdiction. Because the assessment of petitioners' 1983 and 1984 income tax and interest based on the decision entered in the Barrister proceeding is not within our subject-matter jurisdiction in this case, it follows that we have no authority to restrain collection of the assessed 1983 and 1984 income tax and interest. To reflect the foregoing, An order granting respondent's motion and denying petitioners' motions will be issued. ROY E. AND LINDA DAY, PETITIONERS v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT Docket No. 20732-94. Filed January 9, 1997. R determined deficiencies in Ps' Federal income tax for the Marcia Allen Broughton, for petitioners. OPINION NIMS, Judge:* Respondent determined deficiencies in Roy E. and Linda Day's (petitioners or the Days) Federal income tax for the taxable years 1988, 1989, and 1990 in the amounts of $6,791, $14,825, and $10,127, respectively. The only issue for decision is whether petitioners can utilize section 59(g) to compute their tentative minimum taxable income, thereby increasing the extent to which they can apply qualified section 29 credits against their regular income tax for the taxable years 1988 through 1990. For the reasons that follow, we hold that they cannot. For ready reference, the following acronyms are used throughout this Opinion: TMT-tentative minimum tax TMTI-tentative minimum taxable income *This case was reassigned to Judge Arthur L. Nims, III, by order of the Chief Judge. |