                        T.C. Memo. 2001-282



                      UNITED STATES TAX COURT



    HOYT AND SONS RANCH PROPERTIES LTD. NV, SHORTHORN GENETIC
 ENGINEERING 1984-5, J.V., A PARTNER OTHER THAN THE TAX MATTERS
                      PARTNER, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 12613-00.                    Filed October 11, 2001.


     Montgomery W. Cobb, for petitioner.

     Thomas N. Tomashek and Alan E. Staines, for respondent.



                        MEMORANDUM OPINION

     DAWSON, Judge:   This case was assigned to Special Trial

Judge Stanley J. Goldberg pursuant to Rules 180, 181, and 183.

Unless otherwise indicated, section references herein are to the

Internal Revenue Code in effect for the year in issue, and Rule

references are to the Tax Court Rules of Practice and Procedure.
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The Court agrees with and adopts the Special Trial Judge’s

opinion, which is set forth below.

                 OPINION OF THE SPECIAL TRIAL JUDGE

     GOLDBERG, Special Trial Judge:    This matter is before the

Court on respondent’s Motion to Dismiss For Lack of Jurisdiction

on the grounds that the petition was not filed within the time

prescribed by section 6226(a) or (b), and that the petition was

not filed by the tax matters partner, a notice partner, or a 5-

percent group.   Petitioner objects to respondent’s motion and

counters that the notice of final partnership administrative

adjustment (FPAA) is invalid, or, in the alternative, the time

for filing a petition for redetermination with this Court was

equitably tolled.

                             Background

     Respondent determined adjustments to the partnership return

of Hoyt and Sons Ranch Properties Ltd. NV (Ranch Properties) for

its 1994 taxable year as set forth in the FPAA notice.   Ranch

Properties’ 1994 partnership return reflects that the partnership

had 116 partners.

     On August 13, 1998, respondent sent the FPAA notice by

certified mail to Tax Matters Partner, Hoyt and Sons Ranch

Properties, Ltd., at Post Office Box 210, Orovada, Nevada 89425

(Orovada address), and by certified mail to Walter J. Hoyt III,

Tax Matters Partner, at HC 71 Lone Pine Road, Burns, Oregon 97720
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(Burns address).   In prior tax years of Ranch Properties, not at

issue before us, some of the partners of Ranch Properties,

including Shorthorn Genetic Engineering 1984-5 (SGE), J.V.,

received FPAA notices from respondent.     However, no other FPAA

notices were issued or mailed to any partner of Ranch Properties

other than the tax matters partner (TMP) for tax year 1994.

     The 90-day period within which the TMP could file a petition

for redetermination of partnership adjustments with this Court

expired on November 11, 1998.   Sec. 6226(a).    The subsequent 60-

day period within which a partner other than the TMP could file a

petition for redetermination of partnership adjustments expired

on January 11, 1999.   Sec. 6226(b).    SGE is a partnership and

pass-through-partner of Ranch Properties.     SGE, through its

attorney, Montgomery Cobb (Mr. Cobb), filed a petition for

readjustment of partnership items as a partner other than the TMP

on December 7, 2000.   According to the Schedule K-1, Partner’s

Share of Income, Credits, Deductions, Etc., attached to the 1994

partnership return, SGE was a 0.65-percent profit, loss, and

ownership holder of Ranch Properties.     In the FPAA notice

respondent determined that the distributive share and allocation

for each of the 116 partners of Ranch Properties was 0.862

percent.

     The 1994 U.S. Partnership Return of Income (1994 return),

Form 1065, on which this case is based, was prepared by Walter J.
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Hoyt III (Mr. Hoyt).    According to the return, Mr. Hoyt was also

the designated TMP for the partnership.   The Burns address and

Orovada address were listed on the return as the respective

addresses of the TMP and the tax return preparer.

     By letter to respondent, dated June 23, 1998 (Cobb letter),

Mr. Cobb requested, as counsel for “all of the Hoyt investor

partnerships”:

     that all notices and correspondence to Mr. Hoyt as Tax
     Matters Partner or as a partner in the investor
     partnerships, be copied to me as partnerships [sic]
     counsel. If you believe this notice is insufficient
     for any reason, I request that you advise me
     immediately.

     Regardless of any reasons which may be advanced for not
     copying me on partnerships’ notices and correspondence,
     it is the partnerships’ position that any notice sent
     to Mr. Hoyt and not copied to me is insufficient and
     that, should any partnership fail to timely respond to
     such a notice, that failure is excused by the IRS’s
     conduct in failing to copy partnerships’ counsel with
     the notice.

     I have provided to * * * [respondent’s counsel] an
     authorization to release information, listing the
     partnerships and other entities.

As mentioned in the above letter, Mr. Cobb submitted an Amended

Tax Information Authorization form (authorization form) signed by

Mr. Hoyt in his capacity as “Himself, general partner, partner,

and/or member of the entities listed on Exhibit 1; and on behalf

of any entity listed on Exhibit 2 in which he has the ability to

authorize a release.”   Exhibit 1 lists approximately 127
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different entities with corresponding employment identification

numbers (EIN).   At the end of Exhibit 1 is the following

statement:

     ***NOTE***
          There are 29 other partnership entities in which I
     (Mr. Hoyt) was not a partner and was only the paid
     preparer of the partnership return and the two Hoyt &
     Sons Ranch Properties partnerships for which I do not
     have any authority for authorization.

Other than the “NOTE” above, Ranch Properties is not listed in

Exhibit 1 or 2 of the authorization form.

     In response to the Cobb letter, respondent notified Mr.

Cobb, by letter dated July 7, 1998, the following:

     On June 26, 1998, you provided with this office a
     listing of the Hoyt Farms partnerships which you
     represent with respect to Mr. Hoyt’s request for copies
     of partner Forms 906. Please note that we have not
     enclosed a copy of any FPAA certified mailing list with
     respect to any Hoyt Farm partnership which is not
     included on the list or which was deleted from that
     list. If you wish to receive information regarding
     such entities, please provide the appropriate
     disclosure authorizations or powers of attorney.

     If Mr. Hoyt has failed to provide you with any FPAA’s
     for which we have enclosed a related certified mailing
     list, please so inform us in writing and we will
     forward a copy of the relevant FPAA.

A second letter from respondent to     Mr. Cobb was sent on July 13,

1998, effectively stating the same information as the July 7,

1998, correspondence above.   The authorization exhibits indicated

that Ranch Properties was not among the partnerships as to which
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Mr. Hoyt had authority that he could release or delegate to Mr.

Cobb.

     As previously stated, respondent’s pending motion to dismiss

for lack of jurisdiction is based on the grounds that the

petition for readjustment was not filed within either of the time

periods prescribed by section 6226(a) and (b), and that SGE was

not a notice partner, and thus was not entitled to file the

readjustment petition.   Petitioner, in its objection to

respondent’s motion to dismiss, contends:   (1) It is a notice

partner to which the FPAA should have been provided; (2) the FPAA

notice mailed to the TMP at the Orovada address was never

received, and, therefore, invalid; and (3) the period for filing

SGE’s readjustment petition should be equitably tolled due to

respondent’s failure to provide proper notice.   The premise of

SGE’s third argument is that respondent’s failure to provide the

FPAA notice in this case to SGE’s counsel, Mr. Cobb, per the Cobb

letter, invalidates the FPAA.

                            Discussion

     The tax treatment of partnership items generally is

determined at the partnership level pursuant to the unified audit

and litigation procedures set forth in sections 6221 through

6233.   Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA),

Pub. L. 97-248, sec. 402(a), 96 Stat. 648; Maxwell v.

Commissioner, 87 T.C. 783, 788 (1986).   The TEFRA procedures
                               - 7 -


apply with respect to all taxable years of a partnership

beginning after September 3, 1982.     Sparks v. Commissioner, 87

T.C. 1279, 1284 (1986).   The TEFRA procedures apply to the

taxable year 1994 of Ranch Properties.

     This Court has previously held that the standard for

determining the validity of an FPAA is whether the FPAA provides

adequate or minimal notice to the taxpayer of the Commissioner’s

final determination of adjustments to the partnership return.

Triangle Investors Ltd. Pship. v. Commissioner, 95 T.C. 610, 613

(1990); Chomp Associates v. Commissioner, 91 T.C. 1069, 1073-1074

(1988); Byrd Inv. v. Commissioner, 89 T.C. 1, 6-7 (1987), affd.

without published opinion 853 F.2d 928 (11th Cir. 1988).

Furthermore, the validity of an FPAA is not contingent upon

actual receipt by the TMP or a notice partner.     Crowell v.

Commissioner, 102 T.C. 683, 692 (1994); see also Seneca Ltd. v.

Comissioner, 92 T.C. 363, 368 (1989), affd. without published

opinion 899 F.2d 1225 (9th Cir. 1990).

     In the motion to dismiss, respondent contends that the Court

does not have jurisdiction to redetermine any items in the FPAA

because the petition was not filed within the period specified in

section 6226(a) or (b), and on the grounds that SGE is not a

notice partner.

     SGE argues that the Cobb letter, combined with the

authorization by Mr. Hoyt, serves as the notice group request
                               - 8 -


under section 6223(b).   Alternatively, SGE argues that the same

documents provided additional information which enabled

respondent to determine that the FPAA should have been sent to

Mr. Cobb directly.   We disagree with both of SGE’s assertions.

     As relevant herein, section 6223(b)(2) allows a group of

partners having an aggregate of 5 percent or more interest in

profits of the partnership to request notice of the FPAA.     A

member of the group of partners must be designated as the one to

receive notice, and such information must be provided to the

Secretary 30 days prior to the mailing of the FPAA.    Sec.

6223(b)(2) and (a) (flush language).   As specifically stated in

the temporary regulations, the request for notice of a 5-percent

notice group must include the following information:    (1)

Identity of the partnership by name, address, and taxpayer

identification number; (2) specific taxable year for which the

notice group is formed; (3) a designated member of the group to

receive the notices; (4) the name, address, taxpayer

identification number, and profits interest of each member of the

group; and (5) signatures of all partners comprising the notice

group.   Sec. 301.6223(b)-1T, Temporary Proced. & Admin. Regs., 52

Fed. Reg. 6783 (Mar. 5, 1987), as amended in 52 Fed. Reg. 9296-01

(Mar. 24, 1987), and 61 Fed. Reg. 37683 (July 19, 1996).

     SGE’s reliance on the authorization signed by Mr. Hoyt is

without merit.   The authorization lacked the necessary
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information listed above and was for the purpose of authorizing

the disclosure of taxpayer information concerning certain of the

Hoyt Farms partnerships, not including Ranch Properties.    Nowhere

in the Cobb letter, the authorization, or its Exhibits 1 and 2,

does a group of partners having in the aggregate a 5-percent or

greater interest in Ranch Properties for tax year 1994 request

recognition as a notice group or designate one of its members to

receive notices on behalf of such group.   See sec. 301.6223(b)-

1T, Temporary Proced. & Admin. Regs., supra.   To the contrary,

Exhibit 1 states that Mr. Hoyt had no “authority for

authorization” as to “the two Hoyt and Sons Ranch Properties

partnerships”.   To apply such a broad and loose interpretation to

these documents, as SGE would have the Court do, would render the

specific sections of the Code and regulations useless.

Accordingly, because SGE failed to meet any of the requirements

to request treatment as a notice group, or as a member or

designee of such a group, it is not treated under section

6223(e)(1)(B) as entitled to the notice specified in section

6223(a).

     According to the Schedule K-1 issued in connection with

Ranch Properties’ 1994 partnership return, SGE was a 0.65-percent

profit, loss, and ownership holder of Ranch Properties.    SGE does

not dispute that its stated interest in Ranch Properties is less
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than 1 percent.   Therefore, SGE’s only recourse is to belong to a

notice group.   As noted above, SGE did not satisfy the statutory

or regulatory requirements and does not belong to a notice group.

SGE further alleges that Daniel Smith, who, according to the

Schedule K-1 of the 1994 partnership return was a 6-percent

profit, loss, and ownership holder of Ranch Properties, was a

notice partner.   Sec. 6223(b).   Mr. Smith is not a party to this

action before us, and we find SGE’s argument irrelevant as to the

matter at hand.   Whether or not Mr. Smith was afforded proper

notice of the FPAA in issue has no bearing on SGE’s objection to

respondent’s motion to dismiss for lack of jurisdiction.

     Petitioner also argues that the FPAA notice mailed to the

Orovada address was never received by Gary Blackburn, a partner

of SGE who is authorized to receive mail at the Orovada address;

therefore, the FPAA is invalid.   The record shows that the FPAA

notice was mailed to the Orovada address by certified mail on

August 13, 1998, received on August 15, 1998, and subsequently

forwarded to “Hoyt & Sons Fwd Portland OR 97204" on August 17,

1998.   Based upon this evidence we find that respondent properly

notified the appropriate party, i.e., the designated TMP, at the

addresses provided by the partnership on its partnership return.

See sec. 6223(a), (b), and (c).   Respondent mailed the FPAA to

the two addresses shown on Ranch Properties’ 1994 return in a

good faith effort to notify the partners of Ranch Properties of
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the partnership adjustments.    See Crowell v. Commissioner, 102

T.C. at 693.   Respondent is not responsible for Mr. Hoyt’s

failure to provide notice or satisfy his obligation under the

TEFRA provisions.   See sec. 6230(f); Vander Heide v.

Commissioner, T.C. Memo. 1996-74.

     Finally, petitioner contends that a duty was created which

required respondent to mail copies of the FPAA to each of the 116

partners of Ranch Properties because respondent had done so in

prior years.   We disagree.   Respondent satisfied the notice

requirement of section 6223(a) by mailing the FPAA by certified

mail to the TMP at the two addresses noted in Ranch Properties’

1994 tax return.    See Energy Res. Ltd. v. Commissioner, 91 T.C.

913, 914 (1988).    The fact that respondent had sent notices to

SGE or other partners in prior years is irrelevant.     See id. at

917 (The receipt of an FPAA by a less than 1-percent interest

partner, who was not a member of a notice group, does not render

the partner a notice partner).

     Because we concluded above that SGE was neither a notice

partner nor a member of a 5-percent group entitled to notice from

respondent of the FPAA, it is not necessary to discuss SGE’s

equitable tolling argument.    See id.

     Accordingly, we shall grant respondent’s motion to dismiss

for lack of jurisdiction.
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To reflect the foregoing,

                                  An order of dismissal

                             for lack of jurisdiction will

                             be entered.
