Page:United States Statutes at Large Volume 111 Part 1.djvu/1047

 PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 1023 and consistent with that determination timely mails a notice of deficiency to the taxpayer pursuant to section 6212, the notice of deficiency shall be treated as a notice of adjustment under subsection (a) and any petition that is filed in respect of the notice shall be treated as an action brought under subsection (c).". (b) TREATMENT OF PARTNERSHIP ITEMS IN DEFICIENCY PROCEED- INGS.— Section 6211 (defining deficiency) is amended by adding at the end the following new subsection: "(c) COORDINATION WITH SUBCHAPTER C—In determining the amount of any deficiency for purposes of this subchapter, adjustments to partnership items shall be made only as provided in subchapter C". (c) CLERICAL AMENDMENT. —The table of sections for subchapter C of chapter 63 is amended by adding at the end the following new item: "Sec. 6234. Declaratory judgment relating to treatment of items other than partnership items with respect to an oversheltered return.". (d) EFFECTIVE DATE. —The amendments made by thi? section 26 USC 6211 shall apply to partnership taxable years ending after the date note. of the enactment of this Act. SEC. 1232. PARTNERSHIP RETURN TO BE DETERMINATIVE OF AUDIT PROCEDURES TO BE FOLLOWED. (a) IN GENERAL. —Section 6231 (relating to definitions and special rules) is amended by adding at the end the following new subsection: " (g) PARTNERSHIP RETURN TO BE DETERMINATIVE OF WHETHER SUBCHAPTER APPLIES. — "(1) DETERMINATION THAT SUBCHAPTER APPLIES.—I f, on the basis of a partnership return for a taxable year, the Secretary reasonably determines that this subchapter applies to such partnership for such year but such determination is erroneous, then the provisions of this subchapter are hereby extended to such partnership (and its items) for such taxable year and to partners of such partnership. "(2) DETERMINATION THAT SUBCHAPTER DOES NOT APPLY. — If, on the basis of a partnership return for a taxable year, the Secretary reasonably determines that this subchapter does not apply to such partnership for such year but such determination is erroneous, then the provisions of this subchapter shall not apply to such partnership (and its items) for such taxable year or to partners of such partnership.". (b) EFFECTIVE DATE. —The amendment made by this section 26 USC 6231 shall apply to partnership taxable years ending after the date ^°^- of the enactment of this Act. SEC. 1233. PROVISIONS RELATING TO STATUTE OF LIMITATIONS. (a) SUSPENSION OF STATUTE WHERE UNTIMELY PETITION FILED.—Paragraph (1) of section 6229(d) (relating to suspension where Secretary makes administrative adjustment) is amended by striking all that follows "section 6226" and inserting the following: "(and, if a petition is filed under section 6226 with respect to such administrative adjustment, until the decision of the court becomes final), and".

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