*59 An appropriate order will be issued and decision will be entered in accordance with petitioner's computation.
Held, net operating loss carrybacks attributable to settlement of partnership items of a partnership subject to the rules of subchapter C of chapter 63 (the partnership provisions of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), Pub. L. 97-248, 96 Stat. 324), I.R.C., may be taken into account in redetermining partners' personal tax liability pursuant to
*122 SUPPLEMENTAL OPINION
Wells, Judge:
The instant matter arises out of a dispute*60 between the parties over their differing computations under
There are two classes of NOL carrybacks potentially applicable to petitioner's tax liability for the years in issue. The first arises from a settlement made after the memorandum*63 opinion in the instant case had been issued. The settlement covered TEFRA years of an unrelated partnership known as Bank Software. Petitioner seeks to apply an NOL carryback in the amount of $ 38,042 resulting from the settlement of Bank Software TEFRA partnership items for petitioner's 1984 taxable year in the computation of his personal tax liability for his 1981 taxable year under
After due consideration, we hold that the NOL carrybacks arising out of the settlement of Bank Software may be taken into account in the instant
At a hearing held on the instant matter, petitioner stated his willingness to amend his pleadings to place the NOL carrybacks in issue, if such action was required. Respondent indicated that there is no objection to the amendment of petitioner's pleadings on any grounds other than that the Court does not have jurisdiction to take TEFRA partnership items into account in the redetermination of a deficiency in a non-TEFRA proceeding. As the computation petitioner submitted pursuant to
Petitioner contends that we have jurisdiction to take the carrybacks attributable to partnerships governed by the TEFRA provisions into account in redetermining petitioner's tax liability for the years in issue. Petitioner argues that
Respondent contends that the procedure for taking the NOL carrybacks into account is provided by the TEFRA partnership provisions, and not by the provisions ordinarily governing the redetermination of deficiencies, such as
A "partnership item" is defined as an item which is more appropriately determined at the partnership level than at the partner level. Sec. 6231(a)(3). Examples of partnership items include items of income, gain, loss, credit, or deduction of the partnership. Sec. 301.6231(a)(3)-1, Proced. & Admin. Regs. Separation is also required with respect to affected items, defined to mean any item to the extent such item is affected by a partnership item. Sec. 6231(a)(5);
*126 When the Commissioner and a partner enter into a settlement with respect to partnership*69 items, however, such items become nonpartnership items. Sec. 6231(b)(1)(C). Petitioner argues that items covered by a settlement become nonpartnership items and can be considered in a proceeding to redetermine the partner's personal tax liability. Respondent, however, counters that the items covered by a settlement are not converted into nonpartnership items for all purposes. A settlement is applied to a partner by means of a computational adjustment and not under the ordinary deficiency and refund procedures. Sec. 6230(a)(2)(A)(ii); sec. 6230(c);
We, however, do not read the provisions of section 6230(a)(2)(A)(ii), which provides that items covered by a settlement are not subject to the provisions of subchapter B of chapter 63, as depriving us of jurisdiction to take account of the settled items pursuant to
We can see no reason, therefore, why we should be required to ignore any computational adjustments resulting from a settlement of TEFRA partnership items in computing a deficiency due from a partner in such partnership in a case that is before us. Respondent seems to concede as much, stating that, because the settled items have been previously determined, if such items are to be taken into account at all, they may be taken into account for computational purposes only. Respondent notes that the settled partnership items may not be redetermined in the instant proceeding, that the NOL carrybacks claimed must be consistent with the partnership settlement, and that the carryback claim must be made in the applicable limitations period for claiming refunds. We agree with respondent on all of such points. The purpose of
Turning to the facts in the instant case, we hold that petitioner may include the NOL carrybacks attributable to the Bank Software settlement in the
The potential carrybacks which may arise from any settlement regarding the TEFRA years of the Research One and Research Two partnerships, however, are different. As noted above, prior to the resolution of partnership level proceedings, partnership and affected items may not be taken into account in a partner's personal tax case.
In deciding whether to grant petitioner's motion, we must balance petitioner's claim of potential harm against countervailing factors of economy and efficiency in judicial administration, as well as the interests of other petitioners who have agreed to be bound by the result of the instant case in having their tax liability settled. Accordingly, we must consider whether the risk of harm to petitioner is sufficient to justify the burden which would be placed on this Court, as well as the inconvenience to petitioners in other cases stipulated to be bound by the outcome of the instant case and awaiting entry of decision in order to proceed with appeal or finalizing*74 such cases.
Petitioner argues that, in the event respondent does not allow the potential NOL carryback resulting from the asserted potential Research One and Research Two partnerships' settlements, petitioner will be precluded from bringing suit for a refund because the bar of section 6512 will apply, due to the filing of the petition in the instant case. Section 6512(a) provides that no suit for refund may be maintained with respect to a year for which a taxpayer has filed a valid petition with the Tax Court. Congress, however, has ensured that such filing will not interfere with a partner's ability to pursue the remedies provided under the TEFRA partnership provisions. Section 6230(d)(6) provides that the provisions relating to limitations on credit or refund contained in subchapter B of chapter 66 (sections 6511-6515) do not apply to any credit or refund of overpayments attributable to partnership items or affected items. Section 6512 is one of the provisions made inapplicable to refunds claimed under the TEFRA partnership provisions. The enactment of section 6230(d)(6) evinces Congress' intent that a partner should not be impeded by the ordinary refund provisions in seeking*75 a refund attributable to the resolution of a partnership level proceeding. Consequently, petitioner could maintain a refund suit under the TEFRA provisions even though he has filed a petition in the Tax Court covering the years to which he *129 seeks to carry back the NOL's, irrespective of the section 6512 bar.
Moreover, section 6512(a)(4) provides that the bar of section 6512(a) does not apply as to "overpayments attributable to partnership items, in accordance with subchapter C of chapter 63." As we stated in
Thus section 6512(a) recognizes the necessity for separate proceedings arising out of partnership items and nonpartnership items. If petitioner had previously maintained a proceeding in this Court with respect to nonpartnership items, he would not be precluded from bringing the present proceedings with respect to [affected items requiring partner level determinations] * * *. Similarly, he is not precluded from bringing a separate refund action because of a prior proceeding for the same taxable year involving other items. * * * [Citation omitted.]
Petitioner's apprehension is that*76 section 6512(a)(4) might be ineffective to raise the bar of section 6512(a) with respect to the carrybacks because such carrybacks are "affected items" rather than "partnership items". See
In construing the language of the statute, we must give effect to the intent of Congress.
Petitioner also argues that, if the Court enters a decision in the years before it, such years might be closed by the statute of limitations at the time his claim to the carryback arises, and he will consequently be prevented from claiming refunds attributable to such carrybacks in such years. Petitioner points out that section 6511, which generally governs the time for claiming refunds due to carrybacks, is supplanted by the TEFRA partnership provisions, but the TEFRA partnership provisions do not contain provisions similar to those contained in section 6511. Secs. 6230(d)(6), 6511(g). Petitioner argues that such differences in the provisions could restrict the time for claiming refunds due to items involved in a TEFRA partnership proceeding.
The TEFRA partnership provisions, however, provide a mechanism for preventing the difficulty to which petitioner alludes. Section 6230(c)(1)(B) allows a partner to file*79 a claim for refund on the grounds that respondent failed to allow a credit to the partner or make a refund to the partner in the amount of the overpayment attributable to the application of a settlement, a final partnership administrative adjustment (FPAA), or a court decision. The language of such provision is sufficiently broad to encompass the situation where the application of the settlement to the partners produces NOL carrybacks which cause an overpayment in years prior to the years to which the settlement relates. Section 6230(d)(5) provides, moreover, that respondent, to the extent practicable, is *131 to make any credit or refund attributable to a partnership item or affected item without requiring the partner to file a refund claim.
Section 6230(c)(2)(B) provides that a refund claim is to be filed within 2 years of the date on which the settlement becomes final. A suit may be brought with respect to unallowed portions of such claim within 2 years of the time such claim is disallowed, as provided by section 6532. Sec. 6230(c)(3). No refund is allowed, however, after the expiration of the time for assessing a tax with respect to the items giving rise to the claim. *80 Sec. 6230(d)(1). Section 6229(f) provides that, if before the period of limitations runs, partnership items become nonpartnership items due to a settlement between the partner and respondent, or for certain other reasons, the running of the limitations period is extended for 1 year. The section 6229 limitations period acts to extend the limitations period otherwise available under section 6501 when such period has otherwise expired. Sec. 6501(o)(2);
Consequently, petitioner will not be prevented from claiming or suing for refunds attributable to carrybacks resulting from settlements of the TEFRA years of Research One and Research Two at the conclusion of the TEFRA partnership proceedings. The instant case is therefore distinguishable from
*132 To reflect the foregoing,
An appropriate order will be issued and decision will be entered in accordance with petitioner's computation.
Footnotes
*. Daniel S. Goldberg, who represents petitioners in other cases involving the same issues as those decided in the instant case, filed papers as amicus curiae in the instant proceeding (hereinafter referred to as amicus).↩
1. Unless otherwise noted, all section, subchapter, and chapter references are to the Internal Revenue Code as in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure.↩
2. In our memorandum opinion on the merits of the issues involved in the instant case, we sustained respondent's disallowance of certain deductions claimed by petitioner arising out of his interest in the Research One Limited Partnership for petitioner's 1979, 1981, and 1982 taxable years on grounds that the partnership was not engaged in a trade or business during such years. We ordered that the decision be entered under
Rule 155↩ . Pursuant to such order, the parties filed their differing computations.3. Alternatively, amicus has suggested that the Court enter its decision in the instant case, but specifically reserve the availability of the carryback, holding that the deficiencies owed may be decreased by NOL carrybacks from the years affected by the partnership provisions of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), Pub. L. 97-248, 96 Stat. 324. Previously, we have ruled that our decision in a case must consist of a specific dollar amount.
Estate of Bailly v. Commissioner,81 T.C. 949">81 T.C. 949 , 952-954 (1983). An order which specifies an amount of deficiency, but provides that such amount may be later adjusted to reflect future NOL carrybacks, is not a final decision as contemplated by the statutes and rules governing this Court.Estate of Bailly v. Commissioner, supra↩. Accordingly, we decline to enter a decision in the form amicus suggests.4. An amended pleading may be filed, with leave of Court, at any time prior to the entry of final decision. Rule 41(a);
Stromsted v. Commissioner,53 T.C. 330">53 T.C. 330 , 340↩ n.5 (1969).