Page:United States Statutes at Large Volume 96 Part 1.djvu/706

 96 STAT. 664

PUBLIC LAW 97-248—SEPT. 3, 1982 a partnership item. All adjustments required to apply the results of a proceeding with respect to a partnership under this subchapter to an indirect partner shall be treated as computational adjustments. "(7) TAX MATTERS PARTNER.—The tax matters partner of any

partnership is— "(A) the general partner designated as the tax matters partner as provided in regulations, or "(B) if there is no general partner who has been so designated, the general partner having the largest profits interest in the partnership at the close of the taxable year involved (or, where there is more than 1 such partner, the 1 of such partners whose name would appear first in an alphabetical listing). If there is no general partner designated under subparagraph (A) and the Secretary determines that it is impracticable to apply subparagraph (B), the partner selected by the Secretary shall be treated as the tax matters partner. "(8) NOTICE PARTNER.—The term 'notice partner' means a partner who, at the time in question, would be entitled to notice under subsection (a) of section 6223 (determined without regard to subsections (b)(2) and (e)(1)(B) thereof). "(9) PASS-THRU PARTNER.—The term 'pass-thru partner' means a partnership, estate, trust, electing small business corporation, nominee, or other similar person through whom other persons hold an interest in the partnership with respect to which proceedings under this subchapter are conducted. "(10) INDIRECT PARTNER.—The term 'indirect partner' means a person holding an interest in a partnership through 1 or more pass-thru partners. "(11) 5-PERCENT GROUP.—A 5-percent group is a group of partners who for the partnership taxable year involved had profits interests which aggregated 5 percent or more. "(12) HUSBAND AND WIFE.—Except to the extent otherwise provided in regulations, a husband and wife who have a joint interest in a partnership shall be treated as 1 person. "(b) ITEMS CEASE TO BE PARTNERSHIP ITEMS IN CERTAIN CASES.—

"(1) IN GENERAL.—For purposes of this subchapter, the partnership items of a partner for a partnership taxable year shall become nonpartnership items as of the date— "(A) the Secretary mails to such partner a notice that such items shall be treated as nonpartnership items, "(B) the partner files suit under section 6228(b) after the Secretary fails to allow an administrative adjustment request with respect to any of such items, "(C) the Secretary enters into a settlement agreement with the partner with respect to such items, or "(D) such change occurs under subsection (e) of section 6223 (relating to effect of Secretary's failure to provide notice) or under subsection (c) of this section. "(2) CIRCUMSTANCES IN WHICH NOTICE IS PERMITTED.—The Secretary may mail the notice referred to in subparagraph (A) of paragraph (1) to a partner with respect to partnership items for a partnership taxable year only if— "(A) such partner—

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