T.C. Memo. 2007-46



                       UNITED STATES TAX COURT



         LARRY J. AND SHERILYN WADSWORTH, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10823-05.             Filed February 28, 2007.



     Lillian S. Wyshak, for petitioners.

     David R. Jojola and Valerie L. Makarewicz, for respondent.



                         MEMORANDUM OPINION


     VASQUEZ, Judge:    This matter is before the Court on

petitioners’ amended motion to dismiss for lack of jurisdiction,

amended motion to strike, motion to shift the burden of proof,

and request that the Court take judicial notice of certain facts.

     At the time they filed the petition, petitioners resided in

McKinleyville, California.
                               - 2 -

                            Background

     Petitioners jointly filed Federal income tax returns for

2001 and 2002.   Petitioners attached a Schedule E, Supplemental

Income and Loss, to each return.   On their Schedule E for 2001,

petitioners reported $534,424 of total income.   The only item

reported on the Schedule E was nonpassive income from Gold Coast

Medical Services (Gold Coast), a partnership.    On their Schedule

E for 2002, petitioners reported $345,546 of total income.    As in

2001, the only item petitioners reported on their 2002 Schedule E

was nonpassive income from Gold Coast.

     During February 2004 petitioners prepared and filed Forms

1040X, Amended U.S. Individual Income Tax Return, for 2001 and

2002.   On the Form 1040X for 2001, petitioners reported a

$990,700 reduction in adjusted gross income, as well as

associated increases in exemptions and itemized deductions.    On

the Form 1040X for 2002, petitioners reported a $165,116

reduction in adjusted gross income, as well as associated

increases in exemptions and itemized deductions.   Petitioners

attached amended Schedules K-1, Partner’s Share of Income,

Credits, Deductions, etc., to their Forms 1040X for 2001 and

2002.   The amended Schedules K-1 reveal that the sole cause for

the reduced income, increased exemptions, and increased itemized

deductions reported on petitioners’ 2001 and 2002 Forms 1040X was

a reduction in petitioner Larry J. Wadsworth’s (Mr. Wadsworth)
                               - 3 -

net earnings from self-employment that were attributable to his

distributive share of the income or loss of Gold Coast.

     In a notice of deficiency, respondent determined increases

in petitioners’ 2001 and 2002 income of $990,700 and $165,116,

respectively, as well as associated reductions in petitioners’

itemized deductions and exemptions.    Respondent determined

deficiencies of $147,708 and $56,958 in petitioners’ 2001 and

2002 Federal income taxes, respectively.    Respondent also

determined section 6662(a)1 penalties of $29,541.60 and

$11,125.60 for 2001 and 2002, respectively.

     Respondent attached a Form 4549A, Income Tax Examination

Changes, to the notice of deficiency.    On the Form 4549A,

respondent listed adjustments to itemized deductions, exemptions,

and “Sch E - Inc/Loss-Prtnrship/S Corps-Passve/Non-Passve” for

2001 and 2002.   Respondent also attached a Form 886-A,

Explanations of Items, to the notice of deficiency.    On the Form

886-A, under the table for “Sch E - Inc/Loss-Prtnrship/S Corps -

Passve/Non-Passve” adjustments for 2001 and 2002, respondent

entered “your distributive share of the partnership income or

loss [is adjusted] as shown in the attached computation.”      In his

answer (discussed below), respondent asserts that the adjustments

in the notice of deficiency relate to respondent’s determination


     1
        Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
                               - 4 -

that petitioners’ amended income tax returns failed to properly

report Mr. Wadsworth’s alleged distributive share of the income

of Gold Coast.

     On June 13, 2005, petitioners timely petitioned this Court

for a redetermination of the 2001 and 2002 deficiencies.   In

their petition, petitioners argued that the notice of deficiency

was invalid because:   (1) The notice of deficiency is vague and

incomprehensible; and (2) the adjustments at issue are subject to

the partnership-level proceedings of sections 6221 through 6233,

and respondent therefore lacks authority to assert a deficiency

against an individual partner before the issuance of a notice of

final partnership administrative adjustment (FPAA).

     After receiving an extension of time to file, respondent

timely filed his answer to the petition on August 29, 2005.

Paragraph 8 of respondent’s answer consists of detailed

allegations regarding Gold Coast’s income for 2001 and 2002 and

Mr. Wadsworth’s involvement in Gold Coast.   Respondent alleges,

inter alia, that Mr. Wadsworth was a 50-percent partner in Gold

Coast; that Gold Coast had only two partners, both of whom were

individuals; that Gold Coast operated a pharmacy that provided

medical products and services to eligible beneficiaries of the

California Medical Assistance Program; that the California

Department of Health Services (DHS) conducted an audit of Gold

Coast’s records for the period from January 1, 2001, through
                                - 5 -

February 28, 2002; that DHS determined that Gold Coast had been

overpaid in the amounts of $1,981,400.90 and $330,233.09 for the

years 2001 and 2002, respectively; that Gold Coast did not

transfer money or other property to satisfy the asserted

liabilities; that Gold Coast disputed the asserted liabilities;

that Gold Coast filed amended income tax returns claiming a

return and allowance for the disputed liabilities asserted by

DHS; that petitioners filed amended income tax returns for 2001

and 2002 reporting Mr. Wadsworth’s share of the resulting Gold

Coast loss; that DHS’s original finding of overpayment was

reversed by an administrative law judge in 2004; that Gold Coast

is not entitled to claim as a deduction for 2001 and 2002 the

disputed liabilities asserted by DHS; and that petitioners must

therefore recognize Mr. Wadsworth’s distributive share of Gold

Coast income for 2001 and 2002.

     After receiving an extension of time to file, petitioners

timely filed their reply on November 21, 2005.   Petitioners filed

with their reply a motion to dismiss for lack of jurisdiction and

a motion to strike paragraph 8 from respondent’s answer.

Petitioners filed an amended motion to dismiss for lack of

jurisdiction (amended motion to dismiss) and an amended motion to

strike paragraph 8 from respondent’s answer (amended motion to

strike) on December 14, 2005.   The amended motions contained

substantially the same arguments as the original motions.
                                - 6 -

     Pursuant to an order of the Court, respondent filed separate

objections to petitioners’ amended motion to dismiss and amended

motion to strike on December 19, 2005.

     On February 27, 2006, the Court held a hearing on

petitioners’ amended motions.   At the hearing, Floyd Freeman, the

revenue agent who examined petitioners’ 2001 and 2002 income tax

returns, testified.   The Court also received into evidence

several exhibits containing material Mr. Freeman considered in

his examination of petitioners’ 2001 and 2002 returns.

Petitioners did not present evidence at the hearing.

     On March 1, 2006, petitioners filed a memorandum in support

of their amended motion to dismiss for lack of jurisdiction and a

motion to shift the burden of proof to respondent.   Respondent

filed an objection to the motion to shift the burden of proof on

April 3, 2006.

     Pursuant to an order of the Court, petitioners filed a brief

in support of their motions on June 23, 2006.   With this brief,

petitioners filed a request that this Court take judicial notice

of the contents of Form 1065, U.S. Return of Partnership Income,

and its instructions.   After receiving an extension of time,

respondent filed an answering brief on August 7, 2006.
                               - 7 -

                             Discussion

I.   Petitioners’ Amended Motion To Dismiss for Lack of
     Jurisdiction

      Petitioners raise several arguments in support of their

amended motion to dismiss.

      Petitioners argue that because the sole explanation for the

adjustments in the notice of deficiency was an entry of “Sch E -

Inc/Loss-Prtnrship/S Corps-Passve/Non-Passve” on the Form 4549A,

the notice of deficiency was vague and incomprehensible and

therefore invalid.2   In support of that argument petitioners

rely, inter alia, on section 7522(a) and Scar v. Commissioner,

(9th Cir. 1987), revg. 

(1983).3

      Petitioners argue that the notice of deficiency is invalid

because it fails to comply with section 7522(a).   Section 7522(a)

provides, in relevant part, that “Any notice to which this

section applies shall describe the basis for, and identify the

amounts (if any) of, the tax due, interest, additional amounts,

additions to the tax, and assessable penalties included in such

notice.”   However, section 7522(a) goes on to provide that “An



      2
        As 

, respondent also described the
adjustments in the notice of deficiency in slightly more
expansive language on the Form 886-A attached to the notice of
deficiency.
     3
        In support of their motion to dismiss for lack of
jurisdiction petitioners also rely on Shea v. Commissioner, 

(1999). The portion of Shea cited relates to a motion
to shift the burden of proof, and is discussed below.
                               - 8 -

inadequate description under the preceding sentence shall not

invalidate such notice.”   We conclude that petitioners’ reliance

on section 7522(a) is misplaced.

     In Scar v. 

, the U.S. Court of Appeals

for the Ninth Circuit (to which an appeal of this matter would

lie) held that the Commissioner must consider information

relating to a particular taxpayer before the Commissioner can be

said to have determined a deficiency with respect to that

taxpayer.   In Scar, the taxpayers received a notice of deficiency

that disallowed a loss deduction from a partnership in which the

taxpayers owned no interest.   The notice also revealed that the

Commissioner had computed the tax due using the highest marginal

tax rate without examining the return and without supplying any

basis for the applicability of that rate.   The Court of Appeals

held that a notice of deficiency is invalid if it is clear from

the notice itself that the Commissioner had not reviewed the

taxpayers’ return or otherwise made a determination of a

deficiency with respect to the taxpayers’ liability for the

particular taxable year.

     The Court of Appeals subsequently held that the rule

established in Scar applies only where the notice of deficiency

reveals on its face that the Commissioner failed to make a

determination.   See Kantor v. Commissioner, 

, 1521-

1522 (9th Cir. 1993), affg. in part and revg. in part on another
                                 - 9 -

ground T.C. Memo. 1990-380; Clapp v. Commissioner, 

,

1402 (9th Cir. 1989).

     Those circumstances are not present in this case.     Unlike

the notice of deficiency in Scar, the notice of deficiency in

this matter clearly disallowed amounts claimed on petitioners’

2001 and 2002 amended returns:    the notice disallowed the amounts

of $990,700 and $165,116 claimed as reductions to Mr. Wadsworth’s

distributive share of income from Gold Coast for 2001 and 2002,

respectively.   Although the notice of deficiency does not

identify Gold Coast by name, it does determine deficiencies of

$147,708 and $56,958 for 2001 and 2002 respectively.    Those

amounts are identical to the refunds claimed on petitioners’ 2001

and 2002 amended returns.   The notice of deficiency in this

matter therefore did not reveal on its face that respondent

failed to make a determination with regard to petitioners’ 2001

and 2002 tax liabilities.   Consequently, we reject petitioners’

argument that the notice of deficiency cannot serve as the basis

of our jurisdiction because it is not the product of an actual

determination of respondent.

     Petitioners also argue that this Court lacks jurisdiction to

decide whether they received income from Gold Coast because Gold

Coast is subject to the unified partnership procedures of

sections 6221 through 6233.    See Tax Equity and Fiscal
                                - 10 -

Responsibility Act of 1982 (TEFRA), Pub. L. 97-248, sec. 402(a),

96 Stat. 648.

     Under the TEFRA partnership procedures, the tax treatment of

items of income, loss, deductions, and credits is generally

determined in partnership-level proceedings rather than in

separate proceedings involving each partner.     Sec. 6221; H. Conf.

Rept. 97-760, at 600 (1982), 1982-2 C.B. 600, 662.

     Mr. Wadsworth’s distributive share of Gold Coast’s aggregate

income, gain, loss, deduction, or credit is a partnership item.

Sec. 6231(a)(3); sec. 301.6231(a)(3)-1(a)(1)(i), Proced. & Admin.

Regs.     If TEFRA requires that a partnership item be determined at

the partnership-level, then the issuance of an FPAA is a

condition precedent to the exercise of this Court’s jurisdiction

over a partnership item, and we have no jurisdiction to

redetermine any portion of a deficiency attributable to a

“partnership item” in an individual proceeding.     Sec. 6225(a);

Maxwell v. Commissioner, 

, 789 (1986).     However, if

Gold Coast is excluded from TEFRA as a small partnership under

section 6231(a)(1)(B), as respondent contends, what might

otherwise be “partnership items” in a TEFRA proceeding may be

litigated in this individual deficiency proceeding.

        As it applied in the years at issue, section 6231(a)(1)

provided, in pertinent part, as follows:
                              - 11 -

          (A) In general.--Except as provided in
     subparagraph (B), the term “partnership” means any
     partnership required to file a return under section
     6031(a).

            (B)   Exception for small partnerships.--

                 (i) In general.--The term “partnership”
            shall not include any partnership having 10 or
            fewer partners each of whom is an individual
            (other than a nonresident alien), a C corporation,
            or an estate of a deceased partner. For purposes
            of the preceding sentence, a husband and wife (and
            their estates) shall be treated as 1 partner.

                 (ii) Election to have subchapter apply.--A
            partnership (within the meaning of subparagraph
            (A)) may for any taxable year elect to have clause
            (i) not apply. Such election shall apply for such
            taxable year and all subsequent taxable years
            unless revoked with the consent of the Secretary.

     Congress enacted the small partnership exception of section

6231(a)(1)(B) to ensure that only “simple” partnerships would be

excepted.    See McKnight v. Commissioner, 

, 185 (1992),

affd. 

(5th Cir. 1993); Hearings on H.R. 6300 Before

the House Comm. on Ways and Means, 97th Cong., 2d Sess. 259-261

(1982) (describing “simple” partnerships as those whose partners

“treat themselves as co-ownerships rather than partnerships, and

each co-owner resolves his own tax responsibilities separately as

an individual with the IRS”).

     For the years at issue, the temporary regulations issued

under section 6231 required that the election provided for in

section 6231(a)(1)(B)(ii) be made by attaching a statement to the

partnership return for the first taxable year for which the
                                - 12 -

election was to be effective.    Sec. 301.6231(a)(1)-1T(b)(2),

Temporary Proced. & Admin. Regs., 52 Fed. Reg. 6790 (Mar. 5,

1987).    The statement was required to be identified as an

election under section 6231(a)(1)(B)(ii), to be signed by each

person who was a partner at any time during the taxable year to

which the return relates, and to be filed at the time and place

prescribed for filing the partnership return.

of a return preparer, Mr. Wadsworth

filed Forms 1065 for Gold Coast’s tax years 2001 and 2002.      For

both years, question 4 of Schedule B, Other Information, read as

follows:    “Is this partnership subject to the consolidated audit

procedures of sections 6221 through 6233?    If ‘Yes,’ see

Designation of Tax Matters Partner below”.    On both the 2001 and

2002 returns, “No” is marked in the “Yes/No” columns adjacent to

question 4 of Schedule B.    Below question 4, in the section

entitled “Designation of Tax Matters Partner”, both the 2001 and

2002 forms list Mr. Wadsworth as the tax matters partner for the

tax years of the returns.    No section 6231(a)(1)(B)(ii) election

statement was filed with either the 2001 or the 2002 partnership

return.

     Petitioners implicitly concede that Gold Coast did not

elect, in conformity with the terms of the temporary regulations,

to be subject to the unified partnership procedures of TEFRA.

Instead, they argue, inter alia, that the small partnership
                               - 13 -

exception of section 6231(a)(1)(B)(i) is a denial of their

constitutional right to due process and equal protection and is

therefore invalid; or that we should treat the listing of Mr.

Wadsworth as the tax matters partner on the 2001 and 2002 Forms

1065 as a “deemed” section 6231(a)(1)(B)(ii) election.

     Petitioners’ due process arguments are unconvincing.

Petitioners appear to argue that the small partnership exception

of section 6231(a)(1)(B)(i) denies them procedural due process

because it relegates their claims to an individual proceeding

instead of a partnership-level proceeding.   We fail to see how

giving petitioners a choice between two procedural frameworks

amounts to a denial of due process.

     Nor can we understand how the small partnership exception

injures petitioners’ due process rights by making available

individual-level proceedings in addition to partnership-level

proceedings.    The small partnership exception permits this Court

to review in a deficiency suit items that otherwise would be

subject to partnership-level proceedings.    The small partnership

exception therefore offers partners of small partnerships

simplified and expedited access to judicial review.   We cannot

fathom how such a result somehow amounts to a denial of due

process.

     Similarly, we find petitioners’ equal protection arguments

unconvincing.   “Legislatures have especially broad latitude in
                              - 14 -

creating classifications and distinctions in tax statutes.”

Regan v. Taxation With Representation, 

, 547 (1983).

In Durham v. Commissioner, T.C. Memo. 2004-125, we rejected a

taxpayer’s argument that Congress unfairly discriminated between

similarly situated taxpayers by making the interest abatement

provisions of newly amended section 6404(e) effective only for

interest accruing with respect to deficiencies or payments for

tax years beginning after enactment of that section and not to

all instances of managerial errors committed after amendment of

section 6404(e).   In Durham we stated:

     judicial deference [to statutory classifications] flows
     from a recognition that--as a practical matter--
     Congress will often have to draw distinctions between
     different taxpayers who seem in some ways to be in
     similar positions. “No scheme of taxation, whether the
     tax is imposed on property, income, or purchases of
     goods and services, has yet been devised which is free
     of all discriminatory impact.” As with laws granting
     economic benefits, drawing distinctions “inevitably
     requires that some persons who have an almost equally
     strong claim to favored treatment be placed on
     different sides of the [same] line . . . .” Yet courts
     have repeatedly held that these distinctions do not
     violate the Constitution’s guarantee of equal
     protection. Instead they reflect Congress’s exercise
     of its legitimate prerogative to enact laws with an eye
     to their practical administration and cost to the fisc.

citations omitted).    The distinction between a

“partnership” and a “small partnership” for purposes of section

6231(a)(1)(B) does not impinge upon a fundamental right or use a

suspect classification and must therefore be upheld if it has any
                               - 15 -

rational basis.   See Hamilton v. Commissioner, 

, 608

(1977).

     One rational basis for the distinction between TEFRA

partnerships and small partnerships is the complexity of the

TEFRA procedures themselves.   The TEFRA procedures, suited to

complex examinations and litigation of partnership items in the

case of large partnerships, may be unnecessarily burdensome--to

both the Commissioner and taxpayers--for the examination and

litigation of simple partnerships.      We therefore reject

petitioners’ constitutional arguments.

     Nor will we heed petitioners’ call to treat the listing of

Mr. Wadsworth as a tax matters partner on Gold Coast’s 2001 and

2002 partnership returns as a “deemed election” to be subject to

the unified partnership procedures of TEFRA.      A taxpayer must

clearly notify the Commissioner of the taxpayer’s intent to make

an election.   Kosonen v. Commissioner, T.C. Memo. 2000-107

(citing Knight-Ridder Newspapers, Inc. v. United States, 

, 795 (11th Cir. 1984)).    To make an election, “the taxpayer

must exhibit in some manner * * * his unequivocal agreement to

accept both the benefits and burdens of the tax treatment

afforded” by the governing statute.

Commissioner, 

, 839 (1984), affd. 

(5th

Cir. 1986)).   “A taxpayer has not made an election if it is not

clear from the return that an election has been made.”

      As 

, Gold Coast’s partnership returns were

marked “No” in the columns next to the question “Is this

partnership subject to the consolidated audit procedures of

sections 6221 through 6233?”.    No election statement was filed

with the partnership returns.    Under such circumstances, it is

not clear from merely inserting Mr. Wadsworth’s name in the tax

matters partner box that Gold Coast was electing to be subject to

the TEFRA procedures.   The Gold Coast returns--coupled with the

complete absence of any election statement--exhibit more of an

intent to fall outside the TEFRA procedures than an intent to

positively elect into them.   Gold Coast therefore failed to elect

to be subject to TEFRA, and we will deny petitioners’ amended

motion to dismiss.

II.   Petitioners’ Amended Motion To Strike

      In support of their amended motion to strike, petitioners

argue that paragraph 8 of respondent’s answer is an impermissible

attempt to supply the information that was required in the notice

of deficiency.

      Motions to strike are analyzed under Rule 52.   Rule 52

provides that this Court, upon a timely motion of the parties or

on its own initiative, may strike from any pleading any

insufficient claim or defense or any redundant, immaterial,

impertinent, frivolous, or scandalous matter.    Rule 52 was

derived from rule 12(f) of the Federal Rules of Civil Procedure.
                              - 17 -

Estate of Jephson v. Commissioner, 

, 1000 (1983);

Allen v. Commissioner, 

, 579 (1979).     Accordingly, the

principles enunciated by the Federal courts in the interpretation

and application of that rule are applicable here.     Estate of

Jephson v. 

at 1000-1001; Allen v.

at 579.

     In general, motions to strike pleadings have not been

favored by the Federal courts.   Estate of Jephson v.

at 1001; Allen v. 

at 579.

A matter will not be stricken from a pleading unless it is clear

that it can have no possible bearing upon the subject matter of

the litigation.   Estate of Jephson v. 

at

1001; Allen v. 

at 579.

     “A motion to strike should be granted only when the
     allegations have no possible relation to the
     controversy. When the court is in doubt whether under
     any contingency the matter may raise an issue, the
     motion should be denied.” If the matter that is the
     subject of the motion involves disputed and substantial
     questions of law, the motion should be denied and the
     allegations should be determined on the merits. In
     addition, a motion to strike will usually not be
     granted unless there is a showing of prejudice to the
     moving party.

Estate of Jephson v. 

at 1001 (citations

omitted).

     As 

, paragraph 8 of respondent’s answer

contains factual allegations regarding Gold Coast’s business

operations, Mr. Wadsworth’s involvement in Gold Coast, and the
                                  - 18 -

audit of Gold Coast by DHS which led Gold Coast and petitioners

to file amended tax returns for 2001 and 2002.       The allegations

in paragraph 8 clearly bear a relationship to the issues in this

case.       The allegations in paragraph 8 are therefore best left to

a determination on the merits, and we will deny petitioners’

amended motion to strike.       See Estate of Jephson v. 

at 1003.

III.       Petitioners’ Motion To Shift the Burden of Proof

       Petitioners argue that if their motion to dismiss for lack

of jurisdiction is not granted, the burden of proof should be

shifted to respondent.       As best we can tell, petitioners seem to

argue that the burden of proof should be shifted to respondent

with regard to all issues in dispute.       In support of their

motion, petitioners rely on Weimerskirch v. Commissioner, 

(9th Cir. 1979), revg. 

(1977), and, as

mentioned supra, Shea v. Commissioner, 

(1999).4

       Under Rule 142(a)(1), the burden of proof shall be upon the

petitioner, except as otherwise provided by statute or determined

by the Court; and except that, in respect of any new matter,




       4
        Petitioners also rely on Scar v. Commissioner, 

(9th Cir. 1987), revg. 

(1983). As 

, the relevant portions of Scar relate to the issue of
jurisdiction and not to the burden of proof.
                              - 19 -

increases in deficiency, and affirmative defenses, pleaded in the

answer, it shall be upon the respondent.5

     In Weimerskirch v. 

at 362, the U.S.

Court of Appeals for the Ninth Circuit (to which an appeal of

this matter would lie) held that the Commissioner’s determination

of a deficiency which allegedly resulted from unreported income

could not be upheld in absence of any substantive evidence

linking the taxpayer to the alleged income-producing activity.

     The rule in Weimerskirch does not apply to this case.     We

have consistently held that the taxpayer bears the burden of

proof with regard to claimed losses or deductions.   See Time Ins.

Co. v. Commissioner, 

, 313-314 (1986); Chaum v.

Commissioner, 

, 163-164 (1977).   Even if the

deficiencies at issue were assumed to stem from allegedly

unreported income, this case would still not be analogous to

Weimerskirch.   In Weimerskirch, the Commissioner failed to

introduce any evidence connecting the taxpayer with the activity

which allegedly produced the unreported income.   In the matter

before us, petitioners’ indivdual income tax returns and Gold

Coast’s partnership returns all reveal a relationship between

petitioners and the income-producing activity at issue.    We are

therefore not presented with a situation in which respondent



     5
        Petitioners do not allege, and we do not find, that sec.
7491(a) applies to this dispute.
                              - 20 -

relies solely and entirely on the presumption of correctness that

normally attaches to a notice of deficiency.

     Finally, respondent has not yet been given an opportunity to

present evidence supporting his determinations.   Petitioners’

assertion that respondent is merely resting on the presumption of

correctness is therefore premature, and petitioners’ reliance on

Weimerskirch is misplaced.

     Petitioners also rely on Shea v. 

, in

support of their motion to shift the burden of proof.   In Shea,

the Commissioner issued a notice of deficiency in which he

changed a California-resident taxpayer’s filing status from

married filing jointly to married filing separately yet

determined an amount of unreported income without making any

adjustment for California’s community property law.   Had that law

been considered, unless an exception under section 66(b) applied,

the taxpayer would have been required to report and be taxed on

only one-half of the taxpayer’s income from a business he

conducted while married.   The notice of deficiency in Shea did

not refer to California community property law, any exceptions to

that law, or any facts that might support such exceptions.

     Although the parties in Shea agreed that section 66(b)

authorizes the Commissioner to disallow the benefits of community

property law to a taxpayer under certain circumstances, the

taxpayer argued that because the Commissioner made no
                              - 21 -

determination in the notice of deficiency with regard to

community property law or section 66(b), the Commissioner should

bear the burden of proof with regard to his reliance on section

66(b) because it was a “new matter” within the meaning of Rule

142(a).   The Commissioner argued that invocation of section 66(b)

was necessarily implicit in the notice of deficiency.

     In agreeing with the taxpayer, this Court noted that the

notice of deficiency at issue made “absolutely no mention of

community property law, section 66(b), or facts which would allow

respondent to invoke section 66(b).”   Shea v. 

at 191.   This Court also noted that

          Respondent failed to offer any evidence that
     indicated that respondent considered the application of
     community property law or section 66(b) in making his
     determination. In short, it appears to us that
     respondent gave no thought to community property law or
     section 66(b) when the notice of deficiency was
     prepared. Respondent’s apparent failure to even
     consider community property law or section 66(b) in
     making his deficiency determination supports our
     conclusion that section 66(b) was not implicit in the
     notice of deficiency. However, even if respondent’s
     agents had considered such matters, it does not follow
     that they were “necessarily implicit” in the notice of
     deficiency. The objective language in the notice of
     deficiency remains the controlling factor. * * * there
     is nothing in the notice of deficiency that makes
     section 66(b) “necessarily implicit”.

(fn. refs. omitted).

     The notice of deficiency petitioners received is not

analogous to the notice of deficiency in Shea.   The notice of

deficiency in Shea made no reference to the alleged determination
                              - 22 -

that would have increased the taxpayer’s liability; i.e., that

the Commissioner relied on section 66(b) to disregard the income

attribution consequences of California community property law.

Petitioners’ notice of deficiency clearly referenced a

determination regarding petitioners’ distributive share of income

and loss from involvement in a partnership.    Gold Coast was the

only partnership reported on petitioners’ 2001 and 2002

individual income tax returns.   The adjustments in the notice of

deficiency clearly stem from respondent’s determination that the

changes in petitioners’ amended 2001 and 2002 income tax returns

were improper.   We therefore find petitioners’ reliance on Shea

misplaced and decline to shift the burden of proof to respondent.

IV.   Petitioners’ Request for Judicial Notice

      Petitioners request that we take judicial notice of the

contents of respondent’s Form 1065 and the instructions thereto.

Although it is not clear from petitioners’ request, we assume the

request relates to the forms and instructions for 2001 and 2002.

      This Court routinely takes judicial notice of the contents

of the Commissioner’s official publications as published by the

U.S. Government Printing Office.   See, e.g., Nicklaus v.

Commissioner, 

, 118 n.2 (2001); Westcott v.

Commissioner, T.C. Memo. 2006-245; Boltinghouse v. Commissioner,

T.C. Memo. 2003-134 n.2; Stafford v. Commissioner, T.C. Memo.

1997-50, affd. 

(5th Cir. 1998).     We will do so here.
                             - 23 -

     In reaching all of our holdings herein, we have considered

all of petitioners’ arguments in support of their motions, and to

the extent not mentioned above, we find them to be irrelevant or

without merit.

     To reflect the foregoing,


                                        An appropriate order will

                                   be issued.