Page:United States Statutes at Large Volume 111 Part 1.djvu/1044

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Ill STAT. 1020 PUBLIC LAW 105-34—AUG. 5, 1997 26 USC 6011 SEC. 1226. EFFECTIVE DATE. The amendments made by this part shall apply to partnership taxable years ending on or after December 31, 1997. PART II—PROVISIONS RELATED TO TEFRA PARTNERSHIP PROCEEDINGS SEC. 1231. TREATMENT OF PARTNERSHIP ITEMS IN DEFICIENCY PROCEEDINGS. (a) IN GENERAL.— Subchapter C of chapter 63 is amended by adding at the end the following new section: "SEC. 6234. DECLARATORY JUDGMENT RELATING TO TREATMENT OF ITEMS OTHER THAN PARTNERSHIP ITEMS WITH RESPECT TO AN OVERSHELTERED RETURN. Notice. "(a) GENERAL RULE.— If— "(1) a taxpayer files an oversheltered return for a taxable year, "(2) the Secretary makes a determination with respect to the treatment of items (other than partnership items) of such taxpayer for such taxable year, and "(3) the adjustments resulting from such determination do not give rise to a deficiency (as defined in section 6211) but would give rise to a deficiency if there were no net loss from partnership items, the Secretary is authorized to send a notice of adjustment reflecting such determination to the taxpayer by certified or registered mail. "(b) OVERSHELTERED RETURN. — For purposes of this section, the term 'oversheltered return' means an income tax return which— "(1) shows no taxable income for the taxable year, and "(2) shows a net loss from partnership items. "(c) JUDICIAL REVIEW IN THE TAX COURT.— Within 90 days, or 150 days if the notice is addressed to a person outside the United States, after the day on which the notice of adjustment authorized in subsection (a) is mailed to the taxpayer, the taxpayer may file a petition with the Tax Court for redetermination of the adjustments. Upon the filing of such a petition, the Tax Court shall have jurisdiction to make a declaration with respect to all items (other than partnership items and affected items which require partner level determinations as described in section 6230(a)(2)(A)(i)) for the taxable year to which the notice of adjustment relates, in accordance with the principles of section 6214(a). Any such declaration shall have the force and effect of a decision of the Tax Court and shall be reviewable as such. "(d) FAILURE TO FILE PETITION. — "(1) IN GENERAL.— Except as provided in paragraph (2), if the taxpayer does not file a petition with the Tax Court within the time prescribed in subsection (c), the determination of the Secretary set forth in the notice of adjustment that was mailed to the taxpayer shall be deemed to be correct. "(2) EXCEPTION.— Paragraph (1) shall not apply after the date that the taxpayer— "(A) files a petition with the Tax Court within the time prescribed in subsection (c) with respect to a subsequent notice of adjustment relating to the same taxable year, or