Opinion ID: 781368
Heading Depth: 2
Heading Rank: 2

Heading: Abelein Was a Party

Text: 26 Well, says Abelein, even if it was an administrative proceeding, some of the individuals listed as partners really should not have been. Thus, Abelein argues, they were not parties to the proceeding and 26 U.S.C. § 6103(h)(4) requires that they be parties. The argument is based on the thought that if it turns out that a person was not a partner, he could not have been a party to the proceeding that decided that question in the first place. We do not agree; indeed, the argument is a bit of a non sequitur. 27 Under 26 U.S.C. § 6231, a person need not be a partner as such; he need only be one whose tax liability under subtitle A is determined in whole or in part by taking into account directly or indirectly partnership items of the partnership. If the IRS has included a person as a participant at the partnership level, he is surely in danger of having his tax liability affected, especially if, in the long run, the IRS turns out to be correct. Surely, he should have a right to participate in the proceeding; surely he does. Similarly, a person who the IRS decides is a partner and allocates partnership items to is certainly a party to that proceeding, whether he ultimately turns out to be a partner or not. How could the IRS possibly include a person at the partnership level, and still fail to give notice to him, or to someone entitled to receive that notice on his behalf? 28 Nor are we persuaded by Abelein's argument that we should look behind the inclusion itself and then ask whether the IRS properly determined that the person was a partner. The statutes simply do not make any provision for that approach. Still, Abelein insists that our decision in Scar v. Commissioner, 814 F.2d 1363 (9th Cir.1987) requires us to take it. However, Scar dealt with a situation where the IRS had blatantly erred by issuing a notice referring to a partnership in which the Scars had never had any interest or connection. Id. at 1364-65. On those facts, we decided that we would consider whether the IRS ever did make a determination about the Scars' own tax deficiency. Id. at 1367. That is not contrary to what we decide here. Indeed, Scar is hardly apposite. In the first place, Scar did not purport to say that an individual who was sent an inappropriate notice was not a party to the proceeding which ensued. In the second place, Scar strictly limited itself to a case where the notice and its attachments make it patently obvious that no determination has in fact been made. Id. at 1367. Were there any doubt about that in the opinion itself, we have since made the limitation perfectly clear. See Clapp v. Comm'r, 875 F.2d 1396, 1400-02 (9th Cir. 1989). Whatever one might say about the IRS's sending of the FPAAs in this case, one cannot say that it is patently obvious that the IRS did not make any underlying determination about the partnerships and their membership. 3