Petitioner did not exercise his option to purchase Smith's and Fowler's partnership interests in Life Care. By letter dated November 16, 1989, Mr. Reissman advised Mr. Rosenkranz that Smith and Fowler would purchase petitioner's interests in the various Bentley Village entities pursuant to the agreement dated January 12, 1989, and that it1997 Tax Ct. Memo LEXIS 106">*111 was his clients' position that the sale would be effective January 12, 1989. On June 30, 1990, petitioner, Smith, Fowler, and other interested parties executed an agreement (the sale agreement) providing for the transfer of petitioner's interests in the Bentley Village entities, including Life Care, to Smith, Fowler, and others, for $ 2,570,000. The agreement states that $ 200,000 of the purchase price was paid upon execution of the settlement agreement.

Life Care issued petitioner Forms K-1 for each of the taxable years 1989 and 1990. However, petitioners decided to exclude petitioner's distributive share of the partnership's items of income, loss, deduction, and credit in their joint Federal income tax returns for 1989 and 1990 on the ground that petitioner was no longer a partner in Life Care after January 12, 1989.

On June 27, 1994, respondent mailed separate notices of final partnership administrative adjustment (FPAA) to the tax matters partner (TMP) for Life Care determining adjustments to the partnership's tax returns for 1989 and 1990. On August 8, 1994, respondent mailed a copy of the FPAA to petitioners. Each of the FPAA's contains identical language stating:

It 1997 Tax Ct. Memo LEXIS 106">*112 is determined that the purchase and sale of partnership interests between partners Robert McMichael, Hudson Fowler, and Raymond Smith was effective on June 30, 1990 rather than on January 13, 1989. The correct distributive shares of partnership income, loss, deductions, and credits have been determined based on their ownership percentages in accordance with section 706 of the Internal Revenue Code.

Discussion

1. Respondent's Motion To Dismiss for Lack of Jurisdiction and To Strike

As indicated, the petition for readjustment includes allegations that Johanna McMichael is entitled to relief as an innocent spouse under section 6013(e). Respondent moves to dismiss for lack1997 Tax Ct. Memo LEXIS 106">*113 of jurisdiction and to strike asserting that the Court lacks jurisdiction to address the matter in this partnership level proceeding.

It is now well settled that the Tax Court lacks jurisdiction to consider whether a taxpayer/partner is entitled to innocent spouse relief under section 6013(e) in the context of partnership level proceedings. See Dynamic Energy, Inc. v. Commissioner, 98 T.C. 48">98 T.C. 48 (1992); Marthinuss v. Commissioner, T.C. Memo. 1995-58, and cases cited therein. The question of whether Johanna McMichael is entitled to innocent spouse relief can be raised in a partner level affected items proceeding following the issuance of a notice of deficiency by invoking the Tax Court's overpayment jurisdiction. See, e.g., Mann-Howard v. Commissioner, T.C. Memo. 1992-537. Consequently, we shall grant respondent's motion to dismiss for lack of jurisdiction and to strike.

2. Respondent's Motion for Partial Summary Judgment

Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials. Florida Peach Corp. v. Commissioner, 90 T.C. 678">90 T.C. 678, 90 T.C. 678">681 (1988).1997 Tax Ct. Memo LEXIS 106">*114 Summary judgment upon all or any part of the legal issues in controversy is appropriate "if the pleadings, answers to interrogatories, depositions, admissions, and any other acceptable materials, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that a decision may be rendered as a matter of law." Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518">98 T.C. 518, 98 T.C. 518">520 (1992), affd. 17 F.3d 965">17 F.3d 965 (7th Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753">90 T.C. 753, 90 T.C. 753">754 (1988); Naftel v. Commissioner, 85 T.C. 527">85 T.C. 527, 85 T.C. 527">529 (1985). The moving party bears the burden of proving that there is no genuine issue of material fact, and factual inferences will be read in a manner most favorable to the party opposing summary judgment. Dahlstrom v. Commissioner, 85 T.C. 812">85 T.C. 812, 85 T.C. 812">821 (1985); Jacklin v. Commissioner, 79 T.C. 340">79 T.C. 340, 79 T.C. 340">344 (1982).

Respondent argues for partial summary judgment on the basis that petitioner remained a Life Care partner until June 30, 1990. Respondent contends that the "clear1997 Tax Ct. Memo LEXIS 106">*115 and unambiguous" terms of the settlement agreement executed January 12, 1989, and the sale agreement executed June 30, 1990, support her position. Further, respondent contends that petitioner is precluded by the rule articulated in Commissioner v. Danielson, 378 F.2d 771">378 F.2d 771 (3d Cir. 1967), vacating and remanding 44 T.C. 549">44 T.C. 549 (1965), as adopted by the Court of Appeals for the Eleventh Circuit in Bradley v. United States, 730 F.2d 718">730 F.2d 718 (11th Cir. 1984), from offering evidence to vary or counter the terms of the two agreements.⁵

1997 Tax Ct. Memo LEXIS 106">*116 Petitioners assert that material issues of fact regarding the termination of petitioner's status as a Life Care partner remain in dispute and that the rule in 378 F.2d 771">Commissioner v. Danielson, supra, is not applicable under the circumstances presented.

For Federal tax purposes, the terms "partnership" and "partner" are defined in section 7701(a)(2) as follows:

(2) Partnership and partner.--The term "partnership" includes a syndicate, group, pool, joint venture, or other unincorporated organization, through or by means of which any business, financial operation, or venture is carried on, and which is not, within the meaning of this title, a trust or estate or a corporation; and the term "partner" includes a member in such a syndicate, group, pool, joint venture, or organization.

In Commissioner v. Culbertson, 337 U.S. 733">337 U.S. 733, 337 U.S. 733">742 (1949), the Supreme Court held that, in determining whether a partnership has been formed for tax purposes, the proper inquiry is:

whether, considering all the facts--the agreement, the conduct of the parties in execution of its provisions, their statements, the testimony of disinterested persons, the relationship of the parties, their respective abilities and capital contributions, the actual control of income and the purposes for which it is used, and any other facts throwing light on their true intent--the parties in good faith and acting with a business purpose intended to join together in the present conduct of the enterprise. * * * [Fn. ref. omitted.]

Although one can draw an inference from both the settlement agreement and sale agreement that petitioner remained a Life Care partner until June 1990, the agreements do not define the membership1997 Tax Ct. Memo LEXIS 106">*118 of the Life Care partnership or otherwise address petitioner's status. The agreements do little more than describe the terms and conditions by which petitioner ultimately transferred his Life Care partnership interest. In this regard, we are not persuaded that the duration of petitioner's status as a Life Care partner is prescribed solely or unambiguously by the terms of the agreements.

Consistent with the preceding discussion, we conclude that respondent's reliance on 378 F.2d 771">Commissioner v. Danielson, supra, is misplaced. In short, Danielson stands for the proposition that, absent proof showing mistake, fraud, undue influence, duress, or the like, a taxpayer generally is bound by the terms of an agreement to which he is a party where the agreement includes specific allocations or characterizations evincing tax consequences. See Schatten v. United States, 746 F.2d 319">746 F.2d 319, 746 F.2d 319">321-322 (6th Cir. 1984) (per curiam); 730 F.2d 718">Bradley v. United States, supra;Spector v. Commissioner, 641 F.2d 376">641 F.2d 376 (5th Cir. 1981), revg. 71 T.C. 1017">71 T.C. 1017 (1979). Accordingly, an application1997 Tax Ct. Memo LEXIS 106">*119 of the Danielson rule does not abrogate our obligation to consider other factors such as the conduct and relationship of the parties. 337 U.S. 733">Commissioner v. Culbertson, supra.

The record in this case includes conflicting assertions as to whether petitioner remained a Life Care partner following the execution of the settlement agreement on January 12, 1989. ⁶ In addition to the inferences that may be drawn from the agreements, we note that Life Care issued Forms K-1 to petitioner for the taxable years 1989 and 1990 suggesting that the partnership considered petitioner a partner during those periods. On the other hand, there is no dispute that the parties negotiating the settlement agreement recognized that the animosity between petitioner and Smith and Fowler would preclude the continuation of the partnership as originally formed. In addition, petitioner submitted an affidavit stating that it was the intent of the parties to the settlement agreement that petitioner would no longer act as a Life Care partner after the execution of the settlement agreement and that he was in fact excluded from partnership activities after January 12, 1989. Consistent with1997 Tax Ct. Memo LEXIS 106">*120 these assertions, Mr. Reissman sent a letter to Mr. Rosenkranz dated November 16, 1989, advising that Smith and Fowler would purchase petitioner's interest in the various Bentley Village entities pursuant to the agreement dated January 12, 1989, and that it was their position that the sale would be effective January 12, 1989.

Viewing the known facts in a light most favorable to petitioner, we conclude that material facts remain in dispute and that additional factual development is necessary to resolve the question of whether petitioner remained a partner of Life Care until June 30, 1990. In particular, we are unable to determine from the record presented the intent of the parties respecting the composition of the Life Care partnership after the execution of the settlement agreement on January 12, 1989. Consequently, we will deny respondent's motion for partial summary judgment.

To reflect the foregoing,

An order will be issued granting1997 Tax Ct. Memo LEXIS 106">*121 respondent's motion to dismiss for lack of jurisdiction and to strike and denying respondent's motion for partial summary judgment.