See I.R.C. § 6230(a)(1); Woody v. Commissioner, 95 T.C. 193, 201-02 (1990). For this type of affected item the Commissioner is not required to send a notice of deficiency to the individual partner because the deficiency determination is merely computational. Woody, 95 T.C. at 202.

The purpose of section 6230(a)(2)(A)(ii) is to enable the Commissioner to collect amounts due as a result of settlements without the necessity of issuing a statutory notice of deficiency, and we find no suggestion that such provision was intended to restrict the jurisdiction of this Court in the situation present in the instant case. See Woody v. Commissioner, 95 T.C. 193, 205 (1990) (section 6511(g) does not deprive the Court of overpayment jurisdiction in a deficiency proceeding attributable to affected items). Moreover, after a settlement has been reached, the substantive partnership level issues have been resolved, and all that remains is the mechanical procedure of applying such settlement to the partner.

"The first type of affected item requires only a computational adjustment at the partner level, which can only be made at the conclusion of the partnership level proceeding." Woody v. Comm'r, 95 T.C. 193, 201-02 (1990) (citing N.C.F. Energy Partners v. Comm'r, 89 T.C. 741, 744, 1987 WL 45298 (1987)). "The term 'computational adjustment' means the change in the tax liability of a partner which properly reflects the treatment under this subchapter of a partnership item."

The government argues that the normal refund procedures do in fact apply in this case. The government claims that the rationale of Woody v. Commissioner, 95 T.C. No. 15 (1990) supports this contention. At issue in Woody was whether the plaintiff could sue for a refund for a claimed over-payment of the taxes which flowed from a partnership item in spite of the fact that Code § 6511(g) expressly prohibits refund suits for taxes attributable to partnership items.

This Court has repeatedly held that we lack jurisdiction, in a partner-level proceeding involving nonpartnership items (which is the case herein), to redetermine a deficiency, or any portion thereof, attributable to the tax treatment of a partnership item. See, e.g., Saso v. Commissioner, 93 T.C. 730, 734 (1989); Maxwell v. Commissioner, 87 T.C. 783, 788 (1986); see also Powell v. Commissioner, 96 T.C. 707, 712 (1991); Woody v. Commissioner, 95 T.C. 193, 208 (1990).A partnership item is defined by sec. 6231(a)(3) as follows:

But where the affected items are only computational adjustments, deficiency procedures do not apply and the IRS is not required to issue a statutory notice of deficiency to the individual partner. Duffie , 600 F.3d at 385 (citing Woody v. C.I.R. , 95 T.C. 193, 202 (1990) ). Instead, the IRS is merely required to mail the partner a notice of computational adjustment.

But where the affected items are only a computational adjustments, deficiency procedures do not apply and the IRS is not required to issue a statutory notice of deficiency to the individual partner. Duffie, 600 F.3d at 385 (citing Woody v. C.I.R., 95 T.C. 193, 202 (1990)). Instead, the IRS is merely required to mail the partner a notice of computational adjustment.

Their eligibility for such exclusions requires partner level determinations, entitling them to deficiency procedures to resolve the issue. See sec. 6230(a)(2)(A)(i); Woody v. Commissioner, 95 T.C. 193 (1990). Their claim to a sec. 911 exclusion for 2006 was reported on the return as a negative adjustment to "other income" on line 21 of the Form 1040, as respondent's instructions for that Form provide.

See N.C.F. Energy Partners v. Commissioner, 89 T.C. 741 (1987), superseded by statute on other grounds; see also Callaway v. Commissioner, 231 F.3d 106, 110 (2d Cir. 2000), revg. T.C. Memo. 1998-99; Adkison v. Commissioner, 129 T.C. 97, 102 (2007), affd. 592 F.3d 1050 (9th Cir. 2010); Crowell v. Commissioner, 102 T.C. 683, 689 (1994); Carmel v. Commissioner, 98 T.C. 265, 268 (1992); Woody v. Commissioner, 95 T.C. 193, 202 (1990); Dial, USA, Inc. v. Commissioner, 95 T.C. 1, 6 (1990). Before the 1997 amendments, TEFRA provided for the determination of all penalties at the partner level.

See N.C.F. Energy Partners v. Commissioner, 89 T.C. 741 (1987), superseded by statute on other grounds;[11] see also Callaway v. Commissioner, 231 F.3d 106, 110 (2d Cir. 2000), revg. T.C. Memo. 1998-99; Adkison v. Commissioner, 129 T.C. 97, 102 (2007), affd. 592 F.3d 1050 (9th Cir. 2010); Crowell v. Commissioner, 102 T.C. 683, 689 (1994); Carmel v. Commissioner, 98 T.C. 265, 268 (1992); Woody v. Commissioner, 95 T.C. 193, 202 (1990); Dial, USA, Inc. v. Commissioner, 95 T.C. 1, 6 (1990). In N.C.F. Energy Partners we noted the distinction between affected items requiring only a computational adjustment that can be directly assessed and those subject to subsequent deficiency proceedings.