Section 6226(b)(1) provides:

SEC. 6226(b). Petition by Partner Other Than Tax Matters Partner. --

A 5-percent group is defined in section 6231(a)(11) as "a group of partners who for the partnership taxable year involved had profits interests which aggregated 5 percent or more." "The term 'partner' means -- (A) a partner in the partnership, and (B) any other person whose income tax liability under subtitle A is determined in whole or in part by taking into account directly or indirectly partnership items of the partnership." Sec. 6231(a)(2). "The term 'indirect partner' means a person holding an interest in a partnership through 1 or more pass-thru partners." Sec. 6231(a)(10). ⁶ We have 131 T.C. 206">*210 held that an indirect partner is deemed a partner under section 6231(a)(2)(B). Dionne v. Commissioner, T.C. Memo. 1993-117. On the basis 2008 U.S. Tax Ct. LEXIS 32">*39 of these definitions, we conclude that a 5-percent group entitled to file a petition under section 6226(b)(1) can be made up by indirect partners. See also section 301.6231(d)-1, Proced. & Admin. Regs., which prescribes timing rules for determining profits interests of indirect partners for purposes of qualifying as a 5percent group.

It is undisputed that each of the individuals who filed the first petition as a 5-percent group (docket No. 5078-08) was an indirect partner in the partnership who held an interest in the partnership through Fund, which was a pass-thru partner. As such, these five individuals were also "partners" within the meaning of section 6231(a)(2)(B) who held profits interests which aggregated 5 percent or more and therefore qualified as a 5percent group under section 6231(a)(11).

The only "fly in the ointment" is that only one reported case cited by either party directly supports the proposition that indirect 2008 U.S. Tax Ct. LEXIS 32">*40 partners may form a 5-percent group: Third Dividend/Dardanos Associates v. Commissioner, 88 F.3d 821">88 F.3d 821 (9th Cir. 1996), revg. T.C. Memo. 1994-412. In Third Dividend, a notice partner ⁷ which was also a pass-thru partner filed a petition after it had filed for bankruptcy and after it had been notified that it was no longer a party to the partnership proceedings because its partnership items had been converted to nonpartnership items. See sec. 6231(c). On the following day, two indirect partners who held aggregate profits interests in the partnership of more than 5 percent through the pass-thru partner also filed a petition with respect to the same FPAA. This Court dismissed the first petition on the ground that the pass-thru partner's bankruptcy disqualified it from filing a petition and from entitlement to further notice in the partnership proceeding. Because the pass-thru partner was not entitled to notice, the link of notice to the indirect partners had also been cut. We held that because the link of notice had been broken, the partnership items of the indirect partners had converted to nonpartnership 131 T.C. 206">*211 items. As a result, we held that the Court lacked jurisdiction over the petition 2008 U.S. Tax Ct. LEXIS 32">*41 filed by the indirect partners. The Court of Appeals for the Ninth Circuit reversed, holding that the indirect partners qualified as a 5-percent group that was entitled to file a petition regardless of the bankruptcy of the pass-thru partner or whether the link of notice to them had been cut.

The instant case does not involve any bankruptcy or notice issues and is therefore distinguishable from Third Dividend. However, putting those issues aside, we agree with the holding of the Court of Appeals for the Ninth Circuit that this Court has jurisdiction over a timely petition filed by members of a 5-percent group composed of indirect partners. Therefore, we hold that this Court has jurisdiction over the petition filed by the members of the 5-percent group in docket No. 5078-08.

As previously stated, section 6226(b)(1) sets forth our jurisdiction over petitions for readjustment of partnership items filed by notice partners 2008 U.S. Tax Ct. LEXIS 32">*42 and 5-percent groups. Section 6226(b)(2) and (4) then provides:

(2) Priority of the tax court action.--If more than 1 action is brought under paragraph (1) with respect to any partnership for any partnership taxable year, the first such action brought in the Tax Court shall go forward.

* * * *

(4) Dismissal of other actions.--If an action is brought under paragraph (1) in addition to the action which goes forward under paragraph (2) or (3), such action shall be dismissed.

Since we have already held that we have jurisdiction over the petition filed by the 5-percent group at docket No. 5078-08, which was the first action brought, that action must go forward pursuant to section 6226(b)(2). Section 6226(b)(4) would seem to require that the six subsequently filed petitions regarding the same FPAA be dismissed for lack of jurisdiction. See Cablevision of Conn. v. Commissioner, T.C. Memo. 1993-106; Cambridge Research & Dev. Group v. Commissioner, T.C. Memo. 1991-434. However, with respect to the five petitions filed by the individual indirect partners, petitioners argue that there is a statutory exception to the 131 T.C. 206">*212 dismissal requirement of section 6226(b)(4). They glean this exception from section 6226(c)2008 U.S. Tax Ct. LEXIS 32">*43 and (d), which provides:

SEC. 6226(c). Partners Treated as Parties. -- If an action is brought under subsection (a) or (b) with respect to a partnership for any partnership taxable year --

(d) Partner Must Have Interest in Outcome. --

(A) the partnership items of such partner for the partnership taxable year became nonpartnership items by reason of 1 or more of the events described in subsection (b) of section 6231, or

(B) the period within which any tax attributable to such partnership items may be assessed against that partner expired.

Notwithstanding subparagraph (B), any person treated under subsection (c) as a party to an action shall be permitted to participate in such action (or file a readjustment petition under subsection (b) or paragraph (2) of this subsection) solely for the purpose of asserting that the period of limitations for assessing 2008 U.S. Tax Ct. LEXIS 32">*44 any tax attributable to partnership items has expired with respect to such person, and the court having jurisdiction of such action shall have jurisdiction to consider such assertion.[Emphasis added.]

The above emphasized provisions of section 6226(d)(1) were added by the Taxpayer Relief Act of 1997, Pub. L. 105-34, sec. 1239(b), 111 Stat. 1027. The legislative history explains: "The provision * * * permits a partner to participate in an action or file a petition for the sole purpose of asserting that the period of limitations for assessing any tax attributable to partnership items has expired for that person." H. Rept. 105-148, at 594 (1997), 1997-4 C.B. (Vol. 1) 319, 916. ^{82008 U.S. Tax Ct. LEXIS 32">*45}

The individual indirect partners argue that even though their individual petitions raise the same issue regarding the statute of limitations that was raised in the lead petition of the 5-percent group, section 6226(d)(1) permits them each to 131 T.C. 206">*213 file a petition solely for the purpose of asserting that the period of limitations for assessing any tax attributable to partnership items has expired with respect to them. ^{92008 U.S. Tax Ct. LEXIS 32">*46}

Assuming that section 6226(d)(1) may, in some situations, permit a partner who is neither a notice partner nor a member of a 5-percent group to file a petition for the sole purpose of raising the statute of limitations, ¹⁰ we do not think it can be done under the present facts. The pertinent language of section 6226(d)(1) permits a party to "participate" in an existing partnership case "or file a readjustment petition" (emphasis added) for the sole purpose of asserting that the period of limitations has expired as to that 2008 U.S. Tax Ct. LEXIS 32">*47 party. This statutory provision presents parties with a choice. ^{112008 U.S. Tax Ct. LEXIS 32">*48} The individual indirect partners made their choice on February 28, 2008, when they filed their petition as members of a 5-percent group. As petitioners in the petition filed by the 5-percent group, they obviously have elected to participate in that case regarding the statute of limitations issues and should not be able to file separate petitions involving the same issue. This interpretation of section 6226(d)(1) is consistent with the purpose of the unified litigation procedures contained in subchapter C (sections 6221-6234) of chapter 63 of the Internal Revenue Code, which was to resolve partnership issues in one proceeding. Any other 131 T.C. 206">*214 interpretation of section 6226(d)(1) would be contrary to this statutory objective. ¹²

Alternatively, even if each of the five individual indirect partners could have filed a petition under section 6226(d)(1), 2008 U.S. Tax Ct. LEXIS 32">*49 that subsection specifically permits a party to file such a "petition under subsection (b)". Any petition filed under section 6226(b) would be subject to the rule in section 6226(b)(2), which gives priority to the first petition filed with respect to an FPAA, and section 6226(b)(4), which provides for dismissal of subsequent actions brought with respect to the same FPAA. These provisions require that the five petitions filed by the individual indirect partners be dismissed. This still permits all of the parties to litigate all of the issues that have been raised and is consistent with the overall statutory purpose of doing so in one proceeding.

Our jurisdiction to review FPAAs is contained in section 6226. Because the specific provisions of that section give us jurisdiction over the petition filed on February 28, 2008, in docket No. 5078-08 and require dismissal of subsequent actions brought with respect to the same FPAA, we hold that the six petitions filed on February 29, 2008, in docket Nos. 5149-08, 5150-08, 5151-08, 5152-08, 5153-08, and 5154-08 will be dismissed for lack of jurisdiction.

Orders of dismissal for lack of jurisdiction will be entered in docket Nos. 5149-08, 5150-08, 2008 U.S. Tax Ct. LEXIS 32">*50 5151-08, 5152-08, 5153-08, and 5154-08.