§6501 — Limitations on assessment and collection

209(a) effectively overruled the holding in Rand v.

We hereby reaffirm our 8 - holding in Bakersfield and decline respondent's invitation to overrule it .

f that he qualified for a treaty-based position under section 6114(a)(2), provi ling for disclosure of a position "if no return of tax is require 1 to be filed, in such form as the Secretary may prescribe ." Tie Secretary, however, has by regulation prescribed that taxpay rs asserting that a treaty overrules the Code generally must file a return, even if they otherwise wouldn't have to .

Section 6229 and the Matching of Taxable Years Kligfeld19 begins by making clear that he is not trying to get us to overrule Rhone-Poulenc.

Thus, the extended period of 24 [*24] limitations provided in section 6501(c) does not apply.

§ 6501(l)(4) ap- plies retroactively, and that the notice of deficiency for 2004–2008 was untimely because it was issued more than six years after his 2004–2008 tax returns were filed. Held: I.R.C. § 6501(l)(4) is applicable only with re- spect to tax returns filed on or after December 29, 2022. Because P’s returns were filed before December 29, 2022, I.R.C. § 6501(l)(4) does not apply to this case.

By contrast, petitioners attempt to distinguish Lane-Wells on the ground that, in that case, “the taxpayer had two separate tax liabilities—income tax liability and personal holding tax liability—each of which required a separate return.” Because section 6501(a) uses “a definite article” with “a singular subject” (the return), petitioners reason that, “absent a clear statutory or regulatory mandate to the contrary, a taxpayer should not have to file two separate returns with respect to the same

petitioners’ motion for summary judgment under Rule 121.1 Petitioners contend that respondent’s notice 1Unless otherwise noted, all Rule references are to the Tax Court Rules of (continued...) Served 06/30/21 - 2 - [*2] of deficiency issued for their 2006 tax year was untimely because the section 6501(e) six-year limitations period does not apply.

Section 6501(a) limits only the assessment and collection oftax; it does not limit respondent's broad authority to audit retirement plans and, ifappropriate, to issue a final nonqualification letter. The period oflimitations prescribed by section 6501(a), therefore, does not apply to proceedings under section 7476 or to respondent's determinations regarding the qualification ofretirement plans under section 401(a), as they do not involve the imposition ofany tax.

6662(a) 2006 $9,045 $1,809 2007 10,934 2,187 2008 4,117 823 2009 1,619 324 Petitioner moved for summaryjudgment pursuant to Rule 121,¹ arguing that the six-yearperiod oflimitations under section 6501(e)(1)(A)(ii) does not apply for his unpaid Federal income tax for 2006, 2007, and 2008.2 The specific ¹ Rule references are to the Tax Court Rules ofPractice and Procedure.

d of limitations under section 4979A(e)(2)(D) for assessing the excise tax that section 4979A(a) imposes on P for its taxable year 2005 has expired, we conclude that we committed substantial error.4 That is because in so holding we concluded implicit- 4The circumstances involved here are materially distinguishable from the circumstances involved in certain other cases where we denied motions for recon- (continued...) - 10 - ly, as respondent had argued expressly, that section 4979A(e)(2)(D), a

- 60 - Accordingly, the extended limitations period provided in section 6501(c) is inapplicable, and respondent's determinations and adjustments relating to taxable years 1995-2001 are barred.

An exception to the 3-year rule is provided in section 6501(c) (1): (1) False Return.- In the rcase of a false or fraudulent return with the intent to evade tax, the tax may be assessed, or a proceeding in.court for collection of such tax may be begun without assessment, at any time. Respondent argues that the period of limitations in section 6501(a) does not apply because petitioner filed false returns with the intent to evade taxes for the years at issue.

7502(a), 6501(b)(1) . Petitioner's return preparer signed and dated petitioner's 2001 return on July 31, 2002, and the .U .S . Postal Service postmarked the return on August 8,'2002 . Respondent stamped the 2001 return: "RECEIVED Aug . 12, 2002 ATSC IRS #0027", and we find that respondent received petitioner's 2001 return .on .that date . Because respondent received petitioner's 2001 return on August 12, 2002, before the extended due date, the mailbox rule does not apply.

Accordingly, the safe harbor for adequate disclosure of omitted income under section 6501(e)(1)(A)(ii) does not apply .

* * * To give full effect o the differences between the regular tax and altern tive minimum tax, the term "net operating loss carry ack" in section 6501 (h) should not be considered t e same as or the equivalent of "alternative minimum tax carryback" or "alternative capital loss carryba c As we understand it, petitioners a e arguing that, because section 6501 (h) refers only to a net op rating loss carryback, and not to a net operating loss carryba k for AMT purposes, that section does not apply

Petitioner entered into agreements to extend the periods of limitations on assessment under section 6501, not on collection under section 6502 . Thus, the Restructuring Act rule does not apply to petitioner' s case .

that the 6 =yelr period of limitations set forth in section 6501(e) does not apply .

The cases petitioner cites are inapposite, however .

at 912 (facts before us distinguishable from those in Korn Indus., Inc.); Wayne Bolt & Nut Co.

However, section 6229(b)(3) provides an important precondition to extending the period: (3) Coordination with section 6501(c)(4) .--Any agreement under section 6501(c)(4) shall apply with respect to the period described in subsection (a) only if the agreement expressly provides that such agreement applies to tax attributable to partnership items . Although "partnership items" were not referenced in the consents petitioners executed, respondent argues that section 6229 does not apply to this situ

Petitioner contends that the assessment of any additional employment tax liability is barred by the statute of limitations under section 6501, as the notice of determination was issued after the general 3-year period of limitations provided by section 6501(a). Respondent, on the other hand, contends that the general limitations period under section 6501(a) does not apply in this case.

However, we can find no compelling reason to distinguish the logic and reasoning of this Court in Neely v. Commissioner, supra. An entitlement to the statutory relief provided by section 6015 is no less a defense to respondent’s determination than the statutory relief provided by section 6501(a) in the Neely case.

In response to respondent’s argument that section 6229(a) merely extends the section 6501 period in some instances and is inapplicable in this case, petitioner answers: (1) Section 6501 is inapplicable to the assessment of any tax attributable to any partnership item,11 11 The parties are in agreement that this case involves one or more partnership items.

- 5 - 3-year period of limitations under section 6501(a)7 does not apply in this case.

Second, the Fund argues, the open-ended limitation period of section 6501(c)(3) for failing to file a return does not apply because, the Fund states, it was not required to file a return for either year, seeing that its tax liability had been withheld in full by Banker's Trust.

We express no opinion about the scope or validity of any of the consent forms.

Read conceded he was liable for Federal income tax on the redemp- tion, we do not agree that Mr.

Accordingly, we disagree with petitioner's attempt to insert the limitations period of its choosing in lieu of section 6511 in order to secure the benefits of the Regulation.

After concessions, the issues before us are whether payments petitioner received upon settlement of certain patent infringement litigation are includible in gross income or are nontaxable contributions to capital, whether the six-year limitations period under section 6501 applies, and whether penalties under section 6662(a) apply.2 As explained below, we resolve these issues in favor of respondent.

Summary of the Parties’ Arguments Petitioners’ principal contention is that all the adjustments in the notice of deficiency are time barred pursuant to section 6501(a) since the notice of deficiency was not issued within the applicable period of limitations.

We hold that the Lamprechts are liable for the section 6662 accuracy-related penalties for 2006 and 2007 as determined by the Commissioner, and that assessment of the penalties is not barred by the statute of limitations.

We hold the fraud penalty is not sustained for 2007, 2008, or 2009 and further hold that if there is a 25% omission from gross income for 2009, the section 6662(a) penalty applies for that year.

The administrative record shows that petitioner has not met the threshold requirements for a whistleblower award and since we are without authority to compel any action on the part of respondent, we hold that the Whistleblower Office did not abuse its discretion in denying petitioner’s whistleblower award claim.

We hold the forms the IRS received contained enough information and complied with the IRS's form to a sufficient degree that they constituted returns for the purposes ofsection 6501.

The issues for consideration are: (1) whether Watchman's income is taxable to the Pudlos; we hold it is; (2) whetherthe statute oflimitations bars review of the partnership items or the assessment oftax against the Pudlos for any year at issue; we hold it does not; (3) whether the Pudlos are liable for section 6662(a) accuracy-related penalties; we hold they are not.

The issues for consideration are: (1) whether Watchman's income is taxable to the Pudlos; we hold it is; (2) whetherthe statute oflimitations bars review of the partnership items or the assessment oftax against the Pudlos for any year at issue; we hold it does not; (3) whether the Pudlos are liable for section 6662(a) accuracy-related penalties; we hold they are not.

The issues for consideration are: (1) whether Watchman's income is taxable to the Pudlos; we hold it is; (2) whetherthe statute oflimitations bars review of the partnership items or the assessment oftax against the Pudlos for any year at issue; we hold it does not; (3) whether the Pudlos are liable for section 6662(a) accuracy-related penalties; we hold they are not.

Pursuant to section 6501(b)(2), Form 941 that Hollywood Arts filed for each ofthe quarters ended on March 31, June 30, and September 30, 2010, is a return that is deemed filed on April 15, 2011.

We hold the forms the IRS received contained enough information and complied with the IRS's form to a sufficient degree that they constituted returns for the purposes ofsection 6501.

The issues for consideration are: (1) whether Watchman's income is taxable to the Pudlos; we hold it is; (2) whetherthe statute oflimitations bars review of the partnership items or the assessment oftax against the Pudlos for any year at issue; we hold it does not; (3) whether the Pudlos are liable for section 6662(a) accuracy-related penalties; we hold they are not.

The issues for consideration are: (1) whether Watchman's income is taxable to the Pudlos; we hold it is; (2) whetherthe statute oflimitations bars review of the partnership items or the assessment oftax against the Pudlos for any year at issue; we hold it does not; (3) whether the Pudlos are liable for section 6662(a) accuracy-related penalties; we hold they are not.

The Court ofAppeals held that the period oflimitations pursuant to section 6501(a) was triggered only ifdecedent, Travis L.

The issues for consideration are: (1) whether Watchman's income is taxable to the Pudlos; we hold it is; (2) whetherthe statute oflimitations bars review of the partnership items or the assessment oftax against the Pudlos for any year at issue; we hold it does not; (3) whether the Pudlos are liable for section 6662(a) accuracy-related penalties; we hold they are not.

The issues for consideration are: (1) whether Watchman's income is taxable to the Pudlos; we hold it is; (2) whetherthe statute oflimitations bars review of the partnership items or the assessment oftax against the Pudlos for any year at issue; we hold it does not; (3) whether the Pudlos are liable for section 6662(a) accuracy-related penalties; we hold they are not.

We hold the forms the IRS received contained enough information and complied with the IRS's form to a sufficient degree that they constituted returns for the purposes ofsection 6501.

We hold the forms the IRS received contained enough information and complied with the IRS's form to a sufficient degree that they constituted returns for the purposes ofsection 6501.

6501 provides that except as otherwise provided "the amount ofany tax imposed by this title shall be assessed within 3 years after the return was filed * * * and no proceeding in court without assessment for the collection ofsuch tax shall be begun after the expiration ofsuch period." - 9 - [*9] record ofassess

Pursuant to section 6501(h), a deficiency attributable to a net operating loss carryback may be assessed at any time before the expiration ofthe period within which a deficiency for the taxable year ofthe loss that results in the carrybackmay be assessed.

Pursuant to section 6501(h), a deficiency attributable to a net operating loss carryback may be assessed at any time before the expiration ofthe period within which a deficiency for the taxable year ofthe loss that results in the carrybackmay be assessed.

Pursuant to section 6501(h), a deficiency attributable to a net operating loss carryback may be assessed at any time before the expiration ofthe period within which a deficiency for the taxable year ofthe loss that results in the carrybackmay be assessed.

Pursuant to section 6501(h), a deficiency attributable to a net operating loss carryback may be assessed at any time before the expiration ofthe period within which a deficiency for the taxable year ofthe loss that results in the carrybackmay be assessed.

Therefore, we hold that respondent is entitled to the six-yearperiod oflimitations pursuant to section 6501(e)(1)(A), and the determination with respectto petitioner's 2003 tax year was timely.

Statute ofLimitations Issue The parties disagree about whether the period oflimitations for taxable year 2000" is extended pursuant to section 6501(k)24 to include the period described in "The period oflimitations under sec.

Unless the answers to both ofthese questions are in the affirmative, pursuant to section 6501(c)(3) tax may be assessed against petitioner at any time and petitioner's motion must be denied.

Therefore, we hold that assessment ofthe deficiencies is not barred by the statute oflimitations.

6501(e)(1)(A)(ii).2 In applying section 6501(e)(1)(A)(ii), we must consider whether an adjustment to the taxpayer's gross income might be apparent from the face ofthe return to the "reasonable man".

In the Scholtens' Form 872-I," pursuant to section 6501(c)(4) Mr.

.) - 3 - issue without a trial, on the basis of the evidence in the record and their joint statement of facts .' We hold that the fees were affected items subject to the deficiency procedures of subchapter B of chapter 63 (deficiency procedures) .

With exceptions not here relevant, section 6501 provides a 3-yearlperiod from the time a return is filed for the assessment or collection (without assessment) of any tax, including incomeltaxes (the period o f limitations) .

Withl,exceptions not here relevant, section 6501 provides a 3-year period from the time a return is filed for the assessment or collection (without assessment) of any tax, including income taxes (the period of limitations) .

Petitioner concedes that pursuant to section 6501(a) the period for assessment of tax attributable to partnership items for the Manroes' 2002 tax year was open when the FPAA was issued .

Because we hold that the Swansons earned the income, they are liable for the self-employment tax imposed by section 1401 and entitled to the related deduction under section 164(f).

* We look to the date that Barrow filed the original returns, not any amended returns, in applying section 6501(c) (1) .

Section 6501 provides the general period of limitations for assessing any tax imposed by the Code .

Generally, tax - 62 - must be assessed pursuant to section 6501, but interest may be assessed anytime during the collection period of the tax.

With exceptions not here relevant, section 6501 provides a 3-year period from the time a return is filed for the assessment - 6 - or collection (without assessment) of any tax, including income taxes (the period of limitations).

6501 provides, in pertinent part, as follows: SEC.

We hold that petitioner did not; accordingly, we also hold that petitioner did not overpay his income tax for 1989.

Held: Where R failed to put the petition date on the notice, as required by sec.

Petitioners contend that, pursuant to section 183(e), see infra, section 6511(c) controls by virtue of the filing of Forms 5213 with petitioners' 1990, 1991, 1992, and 1993 returns, because, say petitioners, Form 5213 is tantamount to an "extension by agreement" pursuant to section 6501(c)(4).

(Amax) as its common parent, which filed a consolidated Federal income tax return (consolidated return) for each of the years 1984, 1985, and 1986 that included petitioners?4 We hold that they were not 2 Unless otherwise indicated, our Opinion pertains to the years 1984, 1985, and 1986 (period at issue).

Pursuant to section 6501(c)(4), this 3-year period may be extended by the consent in writing of the Secretary and the taxpayer, and the expiration period thus extended may be further extended by subsequent timely agreements in writing.

The “period of limitations” we referred to is supplied by section 6501, which (with several exceptions) sets a 3-year limitations period, measured from the filing or due date of a return, for the Commissioner to assess taxes or issue a notice of deficiency.

Section 6235(c)(2) extends the period of limitations for a partnership adjustment from three years to six if there is a substantial omission as described in section 6501(e)(1)(A). The Commissioner argues that, by reporting its sales of property as installment sales, JM Assets omitted $5,499,437 of gross income, an amount in excess of 25% of JM Assets’ reported gross income of $16,017,287. JM Assets objects to both of the Commissioner’s Motions. JM Assets argues that both Motions should be denied

Under the general rule set forth in section 6501, the IRS is required to assess tax or send a notice of deficiency to a taxpayer within three years after a federal tax return is filed. See § 6501(a). Petitioner and respondent agree that the general limitations period in section 6501 has expired. In the case of a tax imposed on partnership (and affected) items, however, section 6229 sets forth special rules to extend the period of limitations prescribed by section 6501. See Rhone-Poulenc Surfacta

As to the three-year period of limitations for returns under section 6501(a), the parties agree that neither Mr. Goddard nor LGD filed a Form 8264, Application for Registration of a Tax Shelter. Under section 6501(c)(3), the IRS can make an assessment beyond the three-year period of limitations when nothing is filed. On its face, the section 6501(a) limitations claim fails. Moreover, section 6501(a) provides that a tax must generally be assessed “within 3 years after the return was filed” or (if

They argue that the period oflimitations under section 6501 has expired. We hold that the special statute oflimitations rules for TEFRA partnerships under section 6229 apply for Lincoln's non-TEFRA December 31, 2001, tax period and extend the period oflimitations for petitioners' 2001 tax year. By its terms, section 6229 applies only to partnership or affected items. Petitioners argue that as a small partnership Lincoln Partners cannot have partnership or affected items and thus section 6229 doe

e ofdeficiency, respondent determined deficiencies in petitioners' Federal income tax and penalties under section 6662 - 3 - with respect to their tax years 2006, 2007, and 2008.¹ After concessions,2 the issues for decision are (1) whether assessment ofthe deficiencies is time barred under section 6501 and (2) to the extent assessment is not time barred, whether petitioners are entitled to offset gains from sales ofstocks in passive foreign investment companies (PFICs) with losses from sales of

1836 (2012), the allegedly omitted item--gain recognized on CCFH's distribution ofappreciated property to its shareholders--does not constitute an omission within the meaning ofsection 6501(e)(1)(A) because it derives entirely from an overstatement ofoutside basis. In Home Concrete, 566 U.S. at __, 132 S. Ct. at 1841, the Supreme Court held that its interpretation in Colony, Inc. v. Commissioner, 357 U.S. 28, 36 (1958), ofa prior version ofsection 6501(e)(1)(A) applies with equal force to the cu

we have held that “[sjection 6229 provides a[n] [alternative] minimum period of time for the assessment of any tax attributable to partnership items (or affected items)” that can extend, but not reduce, the limitations period otherwise prescribed by section 6501. Rhone-Poulenc Surfactants & Specialties, L.P. v. Commissioner, 114 T.C. at 540-543. Respondent issued the FPAA with respect to CNT’s December 1 return, which covered the taxable period September 15 through December 1, 1999. That taxable

The specific question to be decided is whether the section 6501 period of limitations on assessment and collection expired before the date respondent mailed petitioner the notice of deficiency.

The limitations period under section 6501 has lapsed for all years for which the Yarish ESOP was disqualified except 2004.

at 9) ("In this case, the district court distinguished Colony on the ground that its holding is limited to cases in which the taxpayer is a trade or business selling goods or services."); Salman Ranch Ltd. v. United States, 573 F.3d 1362, 1371 (Fed. Cir. 2009) ("In the government's view, * * * Colony's holding [is properly construed] narrowly by defining 'gross income' as gross receipts of a trade or business from sales of goods or services"); Bakersfield Energy Partners, LP v. Commissioner, 568

dealings in property on its 2000 return was [significantly] understated”. III. Motion for Summary Judgment Petitioner moved for summary judgment, arguing that the FPAA was not timely because it was issued after “The period of limitations imposed by I.R.C. § 6501 on assessment and collection of tax * * * [of] three years from the date the return to which the tax relates was filed.” Both the partnership’s information tax return and the partners’ joint income tax return were filed on or before Oct

After concessions, the issues for decision are: (1) Whether the issuance of the notice of deficiency for each of the years at issue is barred by the expiration of the limitations period for assessment under section 6501; and (2) whether petitioner’s overstated prepayment credits for the years at issue resulted in underpayments of income tax attributable to fraud pursuant to sections 6663 and 6664.

Section 6501 Burden of Proof The bar of the statute of limitations is an affirmative defense, and petitioner bears the burden of proof. See Rules 39, 142(a); Hoffman v. Commissioner, 119 T.C. 140, 146 (2002). We find that petitioner has established a prima facie case that the 3-year period of limitations has expired. Accordingly, the burden of goin

Nor do we read these cases to require that the person who causes a return to be fraudulent under section 6501 must be the person who owes the tax or against whom the fraud penalty is asserted under section 6663.

Discussion Under the general rule set forth in section 6501, the Internal Revenue Service is required to assess tax (or send a notice of deficiency) within 3 years after a Federal income tax return is filed.

hat respondent’s calculations of the beginning and ending inventories of each member of the Huffman - 25 - group are correct. –- The Adjustments Apparently because the expiration of the period of limitations on assessment and collection of tax (see sec. 6501), respondent is limited in the number of years open to adjustment by him. The earliest year open to an adjustment by respondent is 1998 for Nissan, Dodge, and Chrysler, and it is 1997 for Volkswagen. For the earliest and each succeeding year

hat respondent’s calculations of the beginning and ending inventories of each member of the Huffman - 25 - group are correct. –- The Adjustments Apparently because the expiration of the period of limitations on assessment and collection of tax (see sec. 6501), respondent is limited in the number of years open to adjustment by him. The earliest year open to an adjustment by respondent is 1998 for Nissan, Dodge, and Chrysler, and it is 1997 for Volkswagen. For the earliest and each succeeding year

Although “partnership items” were not referenced in the consents petitioners executed, respondent argues that section 6229 does not apply to this situation because the period of limitations under section 6501 is still open.

We apply this test to “returns” for purposes of section 6501,1 section 6651(a)(1),2 1 See, e.g., ICI Pension Fund v.

We apply this test to “returns” for purposes of section 6501, section 6651(a)(1), section 6653(a), section 6662, section 6013, section 6033, section 6651(f), section 6511, section 6011, section 6012, section 6072, and former section 6661, among others.

6501(e)(1)(A), I.R.C., and that the assessment was timely because the amended return was filed 2 days before the expiration of the 6-year period. R argues that the 6-year period applies because, R asserts, the reference to “gross income stated in the return” in sec. 6501(e)(1)(A), I.R.C., does not include any of the income of the partnerships given that Ps neither actively nor materially participated in the trade or business of any of those partnerships. Held: The 6-year period of limitations in

e. Section 6229(a) sets forth a minimum period for assessing any income tax with respect to any person that is attributable to any partnership item or affected item; this minimum period can be greater than, or less than, the period of limitations in section 6501. Id. at 540- 543. Section 6501 contains no exception for deficiencies attributable to partnership items. In drafting section 6229, Congress did not create a completely separate statute of limitations for assessments attributable to partn

Petitioners further contend that the period of limitations for assessing a deficiency relating to nonpartnership items (section 6501) has expired.

er issues are resolved. Unless otherwise indicated, all subtitle, chapter, subchapter, and section references are to subtitles, chapters, subchapters, and sections of the Internal Revenue Code of 1954 as in effect for 1985; except that references to sec. 6501 are to sec. 6501 of the Internal Revenue Code of 1986 as in effect for notices of deficiency mailed in 1992. On brief, petitioners state that this is a jurisdictional issue. However, the instant cases are deficiency cases; thus, the statute

Petitioner contends that the assessment of any additional employment tax liability is barred by the statute of limitations under section 6501, as the notice of determination was issued after the general 3-year period of limitations provided by section 6501(a).

In that case we reasoned: The statute of limitations set forth in section 6501 constitutes a defense at bar (i.e., an affirmative defense) that may be raised by the taxpayer in response to a determination made by the Commissioner.

Relying on our opinion in Henry Randolph Consulting, respondent now argues that we lack jurisdiction to decide which period of limitations applies under section 6501 and whether respondent’s determination was made after the expiration of such period, because such a decision would constitute a substantive determination falling outside of the two determinations which the Court is authorized to make under section 7436(a).

pect to any person that is attributable to any partnership item or affected item. This minimum period is defined in relation to the filing of the partnership return. This minimum period can be greater than, or less than, the period of limitations in section 6501. The principal disagreement between the parties concerns the relationship between section 6229 and section 6501. Petitioner argues that section 6229 stands alone and describes a period that is independent of any period described in secti

dulent tax return with the intent to evade tax. See supra pp. 10-17. Therefore, section 6501(c)(1) is inapplicable to the case at bar, and the assessment of any deficiency for 1989 is barred by the expiration of the period of limitations provided by section 6501. Accordingly, the issue of whether there is a deficiency for 1989 is moot. To reflect the foregoing, Decision will be entered for petitioners.

ng defi- ciencies in, and additions to, petitioner’s Federal income tax (tax): - 2 - Additions to Tax Section Section Year Deficiency 6651(a)(1)1 6654 1989 $1,724 $349 --- 1990 37,975 9,494 $2,486 1991 2,462 616 141 1992 25,267 6,317 1,102 1993 812 189 --- The issues remaining for decision are: (1) Have the respective periods of limitations under section 6501 expired with respect to petitioner’s taxable years 1989, 1990, 1991, and 1992?

--- MAJORITY --- OPINION Laro, Judge: ICI Pension Fund, ICI Pensions Trustee Limited, Trustee, moves for summary judgment, asserting that section 6501 does not allow respondent to assess tax for either year in issue.

legal services; (4) whether petitioner is liable for the additions to tax for fraud prescribed by section 6653(b)(1) and (2); (5) whether petitioner is liable for the addition to tax for substantial understatement of liability prescribed by section 6661(a); and (6) whether the period of limitations on assessment and collection of tax prescribed by section 6501 expired before respondent issued the subject notice of deficiency.

Following actual and deemed concessions by petitioners, we must decide whether respondent is barred from assessing any of the amounts set forth in the notices of deficiency for the subject years.1 Petitioners assert that respondent is barred by either the 3-year period of limitation under section 6501 or a prior proceeding in this Court involving petitioners’ individual income tax liability for 1980.

Congress enacted section 1041, in part, to remedy the “whipsaw” that occurred when one spouse failed to report his or her gain on the transfer of appreciated property to the other spouse; the Government was whipsawed because the transferee’s basis in the transferred property equaled its fair market value, and the transferor, to the extent that the section 6501 period of limitations had closed, never paid any Federal income tax on the appreciated value underlying that increased basis.

As a further alternative argument, petitioner maintains that, if taxpayers must satisfy any dual limitations requirement under the regulation, the period applicable to the party in the deficiency position must be based on section 6501 rather than section 6511.

But section 6501(b)(1) provides that, for pur- poses ofsection 6501, a return "filed before the last day prescribed * * * for the - 10 - [*10] filing thereof, shall be considered as filed on such last day." Petitioners' 2013 return is thus considered to have been filed on April 15, 2014.

As noted, petitioner's 1999, 2000, and 2001 tax years remain open under section 6501 because ofcollateral estoppel.

ith respect to" an excise tax, see sec. 6501(b)(4), nor did petitioner file "a return ofa tax imposed under" the excise tax provisions ofthe Code omitting a substantial amount ofsuch tax, see sec. 6501(e)(3), and therefore the special provisions of sec. 6501 relating to excise taxes do not apply here. - 56 - Petitioner argues, however, that the plan's filing ofForms 5500 for the years at issue should be deemed the filing ofa return required for purposes ofthe section 4972 excise tax, ostensibly

The preeminent instance ofthis truism is the statute oflimitation, section 6501, which is a bar on untimely assessment.

The threshold issue for consideration is whether the section 6501 period of limitations on assessment and collection expired before the date respondent mailed the notice of deficiency, and we consider whether Travis L.

is further suspended, from the date of mailing of the notice until 60 days after the decision of the Court becomes final. See sec. 6901(f). The period of limitations on assessment and collection of tax with respect to the trans-feror is set forth in section 6501. Pursuant to section 6501(h), a deficiency attributable to a net operating loss carryback may be assessed at any time before the expiration of the period within which a deficiency for the taxable year of the loss that results in the carr

t "there were no federal income taxes owed for the years 98, 99, and 2000." The petitions also allege that the "statute oflimitations has run since - 4 - [*4] the filing ofthe Notice ofDeficiency" because "the three (3) years has been tolled and no income taxes are owed." We understand petitioner's argumentto be that the period oflimitation under section 6501 has expired and that respondent is prohibited from making assessments against him for the tax years at issue.

t "there were no federal income taxes owed for the years 98, 99, and 2000." The petitions also allege that the "statute oflimitations has run since - 4 - [*4] the filing ofthe Notice ofDeficiency" because "the three (3) years has been tolled and no income taxes are owed." We understand petitioner's argumentto be that the period oflimitation under section 6501 has expired and that respondent is prohibited from making assessments against him for the tax years at issue.

In Eggertsen I, it was respondent’s position that section 4979A(e)(2)(D), not section 6501, controls resolution of the statute of limitations issue.

ermined in the notice with respect to decedent's taxable year 2007 resulted from a computational adjustment attributable to the determinations that respondent made in the notice with respect to decedent's taxable years 2004 and 2006. 7For purposes ofsec. 6501, as pertinent here, the term "return" means the gift tax return required to be filed by the taxpayer. Sec. 6501(a). - 9 - [*9] Revenue (Commissioner) generally may assess any gift tax imposed by the Code. In the case offailure to file a gif

Accordingly, we shall apply the limitations provisions of section 6501 to decide whether the sectio 6651(f) additions to tax were timely assessed.

§ 6501 ( a) or whether they were affected items subject to TEFRA" .1 Id . at 305 . The parties agree that we can decide this 'Unless otherwise indicated, section and subchapter references are to the applicable versions of the Internal Revenue Code . TEFRA references are to the Tax Equity and Fiscal Responsibility Act of 1982 ,,Pub . L . 97-248 , se

In the case of a tax imposed on partnership items, section 6229 sets forth special rules to extend the period of limitations prescribed by section 6501 with respect to partnership items or affected items.

Petitioner contends that respondent's assessment of his 1995 income tax was time barred because he and Astrid Downing filed their 1995 joint amended return in October 1996 but assessment did not occur until 2001, well beyond the expiration of the 3-year limitations period of section 6501 (a) .6 Respondent contends that section 6330 (c) (2) (B) precludes petitioner from raising this issue in this proceeding .

The general statue of limitations on assessment pursuant to section 6501 (a) is 3 years from the date the return is filed .

Statute of Limitations As a general rule, section 6501 provides that any tax must be assessed within 3 years of the date on which the pertinent tax return was filed.

c Surfactants & Specialties, L .P . v . Commissioner , supra, we addressed the interaction of sections 6229 and 6501 . We rejected the taxpayer's argument that section 6229 provides an assessment period that is independent of the period described in section 6501 . We held that sections 6229 and 6501 provide alternative periods within which to assess tax with respect to partnership items, with the later-expiring period governing in a particular case . Id . at 540-541 . We also held that the issua

- 27 - Because petitioners filed joint Federal income tax returns for 1985 and 1986, the assessment period of limitations under section 6501 remains open as to Martha McHan as well.

82-1873, courts consistently had held that the operation of § 6501 and its predecessors turned on the nature of the taxpayer’s original, and not his amended, return.8 8The significance of the original, and not the amended, return has been stressed in other, but related, contexts.

82-1873, courts consistently had held that the operation of § 6501 and its predecessors turned on the nature of the taxpayer’s original, and not his amended, return.

The issues for decision are whether the statute of limitations under section 6501 bars respondent from assessing petitioner’s 1998 liabilities, and, if respondent is not barred, whether petitioner is liable for the additions to tax.

yment. There is nothing in this record reflecting such motivation by respondent, and in any event respondent is permitted to examine tax years, determine a deficiency, and make an assessment within the applicable period of limitations provided under section 6501. In a situation where a taxpayer does not file a Federal income tax return, respondent may determine a deficiency and assess a tax at any time. Sec. 6501(c)(3). The inability of petitioner to obtain a refund of 3 We note that the determi

Discussion Section 6501 Section 6501(a) sets forth limitations on assessment and provides as a general rule that Federal income taxes must be assessed within 3 years after the filing of the return.

equently, section 7491(a) does not shift the burden of proof on the factual issues raised in this case to respondent, and petitioners must - 36 - bear the burden of proof on all issues in this case, other than the statute of limitations issue under section 6501.26 IV. Whether the Pago and McKenzie Trusts Lack Economic Substance Respondent argues that the Pago and McKenzie Trusts were sham entities with no economic substance and should be disregarded for Federal income tax purposes. Alternatively

equently, section 7491(a) does not shift the burden of proof on the factual issues raised in this case to respondent, and petitioners must - 36 - bear the burden of proof on all issues in this case, other than the statute of limitations issue under section 6501.26 IV. Whether the Pago and McKenzie Trusts Lack Economic Substance Respondent argues that the Pago and McKenzie Trusts were sham entities with no economic substance and should be disregarded for Federal income tax purposes. Alternatively

Generally, tax must be assessed pursuant to section 6501, but interest may be assessed anytime during the collection period of the tax.

Huff's testimony that he mailed petitioners' 1997 tax return to respondent on April 15, 1998, that section 7502 would then treat the postmark date as the date of filing,4 and that the period of limitations under section 6501 would then be shown to have run before respondent issued the subject notice of deficiency to them.

Whether, Pursuant to Section 6501, the Period for Assessing Tax Has Expired for the Years at Issue Generally, the Commissioner must assess tax within 3 years after the due date of a timely filed return.

n were adjusted and 1995 taxable income and penalty were increased by $674,789 and $48,244, respectively. The parties also stipulated that the period of limitations for the assessment of a deficiency has expired for the 1993 taxable year pursuant to section 6501. Background This case was submitted fully stipulated, and the facts are so found. The stipulations of the parties, with accompanying exhibits, are incorporated herein by this reference. Petitioners resided in Santa Ana, California, when

Petitioner’s supplement also argues for the first time that respondent mailed the notice to him with respect to his taxable year 1997 after the period of limitations prescribed by - 7 - section 6501 for that year had expired.

Statute of Limitations As a general rule, section 6501 provides that any tax must be assessed within 3 years of the date on which the pertinent tax return was filed.

There is agreement that the period for assessment under section 6501 was not extended by written consent of the parties.

fraud penalties determined by R. 3. Held, further, Ps, as transferees of DDL’s assets, are liable for DDL’s 1990 and 1991 Federal corporate income tax liabilities (inclusive of the fraud penalties). 4. Held, further, the period of limitations under sec. 6501, I.R.C., has not run as to Ps’ 1990 or 1991 taxable year. Wayne Hagendorf and Richard J. Radcliffe, for petitioners. Igor S. Drabkin and David R. Jojola, for respondent. MEMORANDUM FINDINGS OF FACT AND OPINION LARO, Judge: These cases conce

On these facts, we hold that the duty of consistency applies and that, therefore, petitioner is estopped from claiming that BAC was not a valid S corporation for the years at issue. B. BAC Losses Because BAC is treated as an S corporation for purposes of this case, we must next address the substance of the parties’ arguments with respect

subsection (b) and such person is the person with respect to whose liability the summons is issued (or is the agent, nominee, or other person acting under the direction or control of such person), then the running of any period of limitations under section 6501 (relating to the assessment and collection of tax) or under section 6531 (relating to criminal prosecutions) with respect to such person shall be suspended for the period during which a proceeding, and appeals therein, with respect to th

On these facts, we hold that the duty of consistency applies and that, therefore, petitioner is estopped from claiming that BAC was not a valid S corporation for the years at issue. B. BAC Losses Because BAC is treated as an S corporation for purposes of this case, we must next address the substance of the parties’ arguments with respect

With exceptions not here relevant, section 6501 provides a 3-year period from the time a return is filed for the assessment or collection (without assessment) of any tax, including income taxes (the period of limitations).

that when the jurisdiction of the Court has been properly invoked pursuant to sec. 7436, the Court may properly decide whether the issuance of the Commissioner’s notice of determination is barred by the expiration of the period of limitations under sec. 6501. See Neely v. Commissioner, 115 T.C. 287 (2000). - 12 - As applicable herein, in the case of FICA taxes reportable on Form 941, the return is due on or before the last day of the first calendar month following the calendar quarter for which

nal issues: (1) Whether petitioner is liable for the addition to tax under sec. 6651(a), (2) whether petitioner is liable for the accuracy- related penalties under sec. 6662(a), and (3) whether respondent is barred by the period of limitation under sec. 6501 from assessing tax for the subject years. As to the first of these issues, we hold for petitioner on the basis of our finding that he filed his 1994 return timely. As to the other two issues, we (continued...) - 3 - FINDINGS OF FACT Many fac

Section 6501 provides rules limiting the time during which the amount of any tax can be assessed. As a general rule, section 6501(a) provides that the amount of any tax shall be assessed "within 3 years after the return was filed". Sec. 6501(a). In the case of a deficiency in tax, the Internal Revenue Code further prohibits the assessment of the de

rmation return but also from the 2d-tier partnership'.s information return in order to determine petitioners' appropriate ¹ Unless otherwise indicated, all subtitle, chapter, subchapter, and section references are to subtitles, chapters, subchapters, and sections of the Internal Revenue Code of 1554 as in effect for 1985; except that references to section 6501 cre to section 6501 of the Internal Revenue Code of 1986 as in eff(cid:16)254ct for notices of deficiency mailed in 1992.

The various statutes of limitation that Congress has enacted under the Internal Revenue Code, and particularly section 6501, are essential to our nation's tax system which is - 10 - based on self-assessment and serve "to ensure that passage of time will not prevent collection of the tax unless the Government has been informed by the taxpayer that there is, or might be, tax liability".

1993 caused petitioner to deduct the same $14,000 amount twice. Respondent's section 481 adjustment for 1993 was necessary to - 6 - eliminate the double deduction of the $14,000. We conclude that respondent's section 481 adjustment did not violate section 6501. Petitioner also suggests that the $14,000 franchise tax deduction in question did not, for petitioner, constitute a "material item" and therefore that the section 481 adjustment should not be allowed. Sections 1.446-1(e)(2)(ii)(a) and 1.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

t issue were filed on May 21, 1992, the period of limitations for each such year would have expired on May 21, 1995. The filing of delinquent returns which are not fraudulent is sufficient to commence the running of the period of lim- itations under sec. 6501. See Bennett v. Commissioner, 30 T.C. 114, 123-124 (1958). - 16 - the revenue agent on May 21, 1992, around August 13, 1996, the Service corrected that action on its records and reflected on those records an entry for "substitute for return

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitation under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

MEMORANDUM OPINION LARO, Judge: Petitioner moves for summary judgment, asserting that section 6501 does not allow respondent to assess tax for the years in issue.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

(3) Did the period of limitations for 1992 prescribed by section 6501 expire?

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

- 8 - Petitioner next argues that the period of limitations under section 6501 bars the assessment and collection of the deficiency in income tax for the tax year ending June 30, 1994.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

Thus, pursuant to section 6501, the period of limitation for issuing a notice of deficiency relating to petitioners' 1989 tax would not expire until June 2000 (i.e., 60 days after petitioners' discharge from bankruptcy plus the 3-year limitation period on assessment).

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

a fiscal year ending June 30. John and his brother Neal MacLean 1 John raised as an affirmative defense in his amended petition, and petitioners argue on brief, that assessment is barred by the statute of limitations on assessment and collection in sec. 6501. Because we find that John committed fraud, the period of limitations remains open, and respondent may assess at any time. See sec. 6501(c)(1). - 4 - (Neal) each owned 50 percent of Simco’s stock. Neal was president of Simco, and John was v

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

Section 6501 expressly defines the period that respondent is authorized to assess deficiencies against taxpayers. Petitioners filed their 1992 Federal income tax return on April 15, 1993. Respondent issued the notice of deficiency on October 18, 1995. Since the latter date is within the 3 years of the former, the notice of deficiency was timely und

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

IRA contends that the period of limitations under section 6501 expired prior to the time the notice of deficiency for 1980 was issued.

Petitioners do not contend that the period of limitations on assessments set forth in section 6501 applies in these cases.

agreement or any extension thereof under section 6501(c)(4). That section provides for an extension of time for assessment by agreement in writing signed by both the Secretary and the taxpayer, if done before the expiration of the time prescribed in section 6501. Section 6512(b)(3), in effect, allows a credit or refund of an overpayment if the Tax Court finds, among other things, that the overpayment was made within the period specified in section 6511(c). The latter period comes into play where

When the Commissioner resorts to the deficiency procedure, it is clear that the period of limitations applicable to such course of action, i.e., section 6501, is controlling rather than the 2-year period applicable to suits for the recovery of erroneous refunds.

There are several exceptions listed in section 6501 (for cases in which, for example, fraud or substantial omission of items are involved) which the parties agree do not apply here.

Consistent therewith, section 6501 provides that the limitations period within which the Commissioner must assess a tax deficiency starts when the return is filed--not when an installment payment was due--and a return of tax filed before the last day prescribed therefor is deemed filed on such last day.

ee Manning v. Commissioner, T.C. Memo. 1993-127; see also Wilson v. Commissioner, a Memorandum Opinion of this Court dated Feb. 21, 1952. Petitioner did not make the 2 At the outset, we note that petitioner argues that the period of limitation under sec. 6501 has expired on the instant years. We disagree. The notice of deficiency was issued on July 17, 1995, which is within the 3-year period set forth in sec. 6501(a). Although the charitable contribution from which the carryover arose was outsid

(2) Has the period of limitations under section 6501 for each of the years 1984, 1985, and 1986 for the assessment of tax due from petitioners’ group expired?

6654 1989 $2,119 $530 $144 1990 2,456 614 160 1991 2,584 100 --- The issues for decision are: (1) Whether petitioner is liable for Federal income taxes on wages received during the years in issue; (2) whether section 6501 bars the assessment and collection of taxes when a taxpayer fails to file returns; (3) whether petitioner is liable for additions to tax pursuant to section 6651(a); and (4) whether petitioner is liable for additions to tax pursuant to section 6654.

The issues for decision are: (1) Whether petitioner is liable for Federal income tax on the proceeds from the sale of property and Social Security benefits received during the year in issue; (2) whether section 6501 bars assessment and collection of petitioner's tax; and (3) whether petitioner is liable for an addition to tax pursuant to section 6651(a).

(ERL), a limited partnership of which petitioner husband was a limited partner, was devoid of economic substance. We hold that it was. 2The petition also presents an issue of whether respondent is barred from assessing the taxes at issue pursuant to sec. 6501. Petitioners, however, did not address this issue at trial, nor did they discuss it in their posttrial briefs. Accordingly, the issue is deemed to have been conceded and is not discussed herein. - 3 - (2) Whether notes ERL issued with respe

6501 provides, in pertinent part, as follows: Sec. 6501. LIMITATIONS ON ASSESSMENT AND COLLECTION. (a) General Rule.--Except as otherwise provided in this section, the amount of any tax imposed by this title [title 26, the Internal Revenue Code] shall be assessed within 3 years after the return was filed (whether or not such return was filed o

1954), affd. 231 F.2d 8 (5th Cir. 1956); H. Rept. 849, 79th Cong., 1st Sess. (1945), 1945 C.B. 566, 583. When the Commissioner resorts to the deficiency procedure, it is clear that the period of limitations applicable to such course of action, i.e., sec. 6501, is controlling rather than the 2-year period applicable to suits for the recovery of erroneous refunds. Pesch v. Commissioner, supra; Krieger v. Commissioner, supra. Under the general rule of section 6501(a), a deficiency must be assessed

(ERL), a limited partnership of which petitioner husband was a limited partner, was devoid of economic substance. We hold that it was. 2The petition also presents an issue of whether respondent is barred from assessing the taxes at issue pursuant to sec. 6501. Petitioners, however, did not address this issue at trial, nor did they discuss it in their posttrial briefs. Accordingly, the issue is deemed to have been conceded and is not discussed herein. - 3 - (2) Whether notes ERL issued with respe

Discussion With exceptions not here relevant, section 6501 provides a 3-year period from the time a return is filed for the assessment or collection (without assessment) of any tax, including income taxes (the period of limitations).

Section 6503(a)(1) provides in pertinent part: The running of the period of limitations provided in section 6501 * * * shall (after the mailing of the notice under section 6212(a)) be suspended for the period during which the Secretary is prohibited from making the assessment or from collecting by levy or a proceeding in court (and in any event, if a proceeding in respect of the deficiency is placed on the docket of the Tax Court, until the decis

“The purpose of § 481 is to prevent either a dis- tortion of taxable income or a windfall to the taxpayer arising from a change in accounting method when the statute of limitations bars reo- pening of the taxpayer’s earlier returns.” Suzy’s Zoo v. Commissioner, 273 F.3d 875, 883 (9th Cir. 2001), aff’g 114 T.C. 1 (2000). Section 481 was enac

Unreported Income The Code provides that “gross income means all income from whatever source derived,” including “[c]ompensation for services.” § 61(a)(1).

Therein, she alleged that section 6501 bars respondent from assessing income tax for her 2009 taxable year because the limitations period expired on October 15, 2013, before the mailing of the notice of deficiency.

Parties must set forth the defense of the statute of limitations in their pleadings. Rule 39. As petitioners failed to properly plead this issue, we do not consider it other than to note that, even if it had been pleaded properly, petitioners also failed to provide any evidence as to when they filed their 2016 return. See Sundstrand Corp. &

We have previously stated that section 6229 extends the period of limitations for section 6501 with respect to tax attributable to partnership items or affected items, and therefore we will not reexamine this issue.

However, section 6501 points us to section 6229 for periods of limitation related to partnership items.

e Commissioner’s ability to correct errors on old tax returns.” Id. In discussing this “notable” feature of section 481, this Court recognized in Huffman that “[w]hile section 481 may not necessarily conflict with the statute of limitations found in section 6501 . . . , it does place a premium on distinguishing between the correction of errors (which is limited to open years) and a change in a method of accounting (which implicates section 481).” Huffman, 126 T.C. at 341–42 (citing Superior Coac

ct his foreign housing expenses for 2008; and whether he is entitled to a foreign tax credit for 2003 through 2006. The section 6663 fraud issue is more straightforward, but it bears on a related issue: the period of limitations for assessment under section 6501. Mr. Clemons argues that the section 6501(a) three-year period of limitations bars assessment. The Commissioner argues that the deficiencies may be assessed at any time under section 6501(c)(1) because they were due to fraud. Mr. Clemons

Ziroli paid to the SEC was not a “fine or similar penalty” within the meaning of section 162(f).

any reference to the extension for assessment of tax deficiency also includes the applicable additions to tax and penalties. Secs. 6501(a), 6651, 6662; see Leach v. Commissioner, T.C. Memo. 1993-215, 1993 WL 166944, at *3 (showing the application of sec. 6501 and sec. 6651(a)(1) addition to tax, noting that when a taxpayer fails to file a return “the period of limitations does not bar assessment of the deficiency and additions to tax”); see also Balice v. Commissioner, T.C. Memo. 2009-196 (apply

Petitioner also argues that the section 6501 - 30 - [*30] statute oflimitations on assessment bars assessment and collection ofany income tax liability for 2009.

upplemented by T.C. Memo. 2011-243. But we conclude that the result in this 5We construe petitioner's challenge to the period oflimitations as relating to the statute oflimitations applicable to collection, see sec. 6502, rather than assessment, see sec. 6501. However, we observe that the SO verified that the IRS had complied with the period oflimitations on assessment ofthe liability. See secs. 6201(a), 6501(a), 6672(b); Dinino v. Commissioner, T.C. Memo. 2009-284, slip op. at 18. - 15 - [*15]

Ofthe adjustments deter- mined in the notice ofdeficiency, $1,132,095 (or 67% ofthe total) arise from the section 481 adjustment. Section 481 is captioned "Adjustments required by changes in method of accounting." Petitioners agree that this section applies regardless ofwhether an accounting method change is initiated by the taxpayer or

Ifapplication ofsection 6501 depends on whether the taxpayerwas in fact a bona fide resident, rather than on whether he or she filed as such, then section 7654 should be interpreted in exactly the same way, i.e., as requiring actual residency rather thanjust a VIBIR return reporting residency.

Ifapplication ofsection 6501 depends on whether the taxpayerwas in fact a bona fide resident, rather than on whether he or she filed as such, then section 7654 should be interpreted in exactly the same way, i.e., as requiring actual residency rather thanjust a VIBIR return reporting residency.

6503(a)(1) provides: The running ofthe period oflimitations provided in section 6501 * * * on the making ofassessments or the collection by levy or a proceeding in court, in respect ofany deficiency as defined in section 6211 (relating to income, estate, gift and certain excise taxes), shall (after the mailing ofa notice under section 6212(a)) be suspended for (continued...) -27- as redetermined by the Tax Court "shal

This intention is underscored by provisions in FETIA that amend section 6501 to exclude specifically criminal restitution from the usual three-year limitation period.

Ifapplication ofsection 6501 depends on whether the taxpayerwas in fact a bona fide resident, rather than on whether he or she filed as such, then section 7654 should be interpreted in exactly the same way, i.e., as requiring actual residency rather thanjust a VIBIR return reporting residency.

from 2002-07 is 6% ofthe fair market value ofhis or her respective Roth IRA account at yearend.¹6 ¹5The income tax treatment ofthe payments from the FSC to the Roth IRAs is not before us because any income tax issues from 1998-2001 are barred by the sec. 6501 statute oflimitations. See Mazzei v. Commissioner, T.C. Memo. 2014- 55, at *12 ("[F]or income tax purposes the applicable respective periods of limitations for taxable years 1998 through 2001 during which the Mazzei partnership/Western Grow

ate to apprise the Secretary ofthe nature and amount of such item. Sec. 6501(e)(1)(B)(iii) was made effective for returns filed after July 31, 2015, as well as for returns filed on or before that date if(on that date) the period for assessment under sec. 6501 (determined without regard to amendments made by sec. 2005 ofthe Act) remained open. Act sec. 2005(b), 129 Stat. at 457. Consequently, sec. 6501(e)(1)(B)(iii) could be interpreted to apply to one or more ofthe years at issue. However, since

- 3 - [*3] period oflimitations provided in section 6501¹ had expired before assessment.

from 2002-07 is 6% ofthe fair market value ofhis or her respective Roth IRA account at yearend.¹6 ¹5The income tax treatment ofthe payments from the FSC to the Roth IRAs is not before us because any income tax issues from 1998-2001 are barred by the sec. 6501 statute oflimitations. See Mazzei v. Commissioner, T.C. Memo. 2014- 55, at *12 ("[F]or income tax purposes the applicable respective periods of limitations for taxable years 1998 through 2001 during which the Mazzei partnership/Western Grow

Since petitioners had filed their 2009 return on August 10, 2010, the three-year limitations period was originally set to expire on August 10, 2013. However, upon proper mailing ofthe notice ofdeficiency, that period was extended until January 7, 2014. See sec. 6503(a)(1). Because the IRS had assessed the tax on December 20, 2013, the SO

0(c)(5)(B) as applied by the Commissioner in this case is contrary to the congressional intent to permit portability and is "unconstitutional for lack of - 8 - due process" because it overrides the statute oflimitations on assessment established in section 6501. In its reply briefMinnie's estate argues that the taxable gifts given by Minnie should not be included in the taxable estate for the purpose ofdetermining the estate tax liability. This argument was not properly raised in the petition or

Section 6501 sets forth several exceptions to the three-year rule, including the exception that appears in section 6501(e)(1)(B).2 It provides: "Ifthe taxpayer omits from gross income an amount properly includible therein under section 951(a), the tax may be assessed * * * at any time within 6 years after the return was filed." The IRS determined i

Section 453(a) provides that income from an installment sale shall be taken into account for purposes oftaxation under the installment method.

Section 453(a) provides that income from an installment sale shall be taken into account for purposes oftaxation under the installment method.

Section 453(a) provides that income from an installment sale shall be taken into account for purposes oftaxation under the installment method.

For purposes ofsection 6501, those returns were considered filed on the last day prescribed by law for the filing thereof.

After concessions, the issues for decision are: (1) whetherthe issuance ofthe notices of deficiency for 2008 is barred by the expiration ofthe limitations period for assessment pursuantto section 6501' and (2) whether the Bells' transfer ofassets to MBA was a sale or a capital contribution.

After concessions, the issues for decision are: (1) whetherthe issuance ofthe notices of deficiency for 2008 is barred by the expiration ofthe limitations period for assessment pursuantto section 6501' and (2) whether the Bells' transfer ofassets to MBA was a sale or a capital contribution.

nd payment obligations, without regard to objective facts indicating their residence. Ps each filed a motion for summaryjudgment maintaining the IRS' notices ofdeficiency were untimely mailed, i.e. the notices were mailed after the expiration of the I.R.C. sec. 6501 period oflimitations; hence, the IRS' assessment oftax was time barred. Held: The assertion thatthe period oflimitations expired before the IRS' mailing ofa notice ofdeficiency is an affirmative defense which Ps must prove. Held, fur

nd payment obligations, without regard to objective facts indicating their residence. Ps each filed a motion for summaryjudgment maintaining the IRS' notices ofdeficiency were untimely mailed, i.e. the notices were mailed after the expiration of the I.R.C. sec. 6501 period oflimitations; hence, the IRS' assessment oftax was time barred. Held: The assertion thatthe period oflimitations expired before the IRS' mailing ofa notice ofdeficiency is an affirmative defense which Ps must prove. Held, fur

If(1) the section 6702 penalty is considered a tax for purposes ofsection 6501 and (2) Mr.

In Elliott, we considered whether a return submitted in the taxpayer's name to the IRS and signed only by the taxpayer's attorney was sufficient to begin the running ofthe section 6501 period oflimitations on assessment and collection oftax.

Ifthe loss-generating prior years are "closed" for purposes ofthe statute oflimitations (section 6501), then for those years that statute bars the assessment oftax but does not bar "adjustments" or "disallowances" that eliminate the loss (and that eliminate NOL deductions in other, "open" years).

Specifically, he contends that the normal three-year period oflimitations prescribed in section 6501 bars the assessment ofany deficiency attributable to the NY Life dividends.

- 16 - [*16] I. Section 2032A Alternate Use Valuation We start with an explanation ofthe interplay between section 2032A and general principles ofestate-tax law. One ofthose general principles is that the value ofproperty for estate-tax purposes is its fair market value. See sec. 2031; Estate ofElkins v. Commissioner, 140 T.C. __, __(sl

Ifthe loss-generating prior years are "closed" for purposes ofthe statute oflimitations (section 6501), then for those years that statute bars the assessment oftax but does not bar "adjustments" or "disallowances" that eliminate the loss (and that eliminate NOL deductions in other, "open" years).

[Emphasis added.] 26 C.F.R. sec. 1.6001-1(e), Income Tax Regs. A taxpayer's books and records for a given tax year "may become material" for purposes ofsection 6001 as long as the period oflimitations on assessment for that year remains open under section 6501. Since the period oflimitations is still open with respect to the tax 28The record contradicts Mr. Bailey's contention that he was given no notice that the IRS might challenge his profit m tive. Revenue Agent Tabor issued five IDRs to Mr.

We agree with petitioners. Respondenthas failed to show by clear and convincing evidence that any ofthe underpaymentoftax for either ofthe years at issue was due to fraud. We now address fraud. Fraud is an intentional wrongdoing on the part of the taxpayerwith the specific purpose ofevading a tax believed to be oiving. Webb v. Commission

Untimeliness ofthe notice ofdeficiency is an affirmative defense. Adler v. Commissioner, 85 T.C. 535, 540 (1985). The taxpayermust specifically plead it. Rule 39. Karl Weatherly did not raise the question oftimeliness in the pleadings (or otherwise). The Weatherlys' brief conceded that they had waived any timeliness defense by not pleadi

ss stock); and whetherpetitioner should have been granted, pursuant to section 301.9100-3, Proced. & Admin. Regs., an extension oftime to file a section 1045 election. 3Petitioner concedes that (1) the periods oflimitations on assessment provided by sec. 6501 remain open for 2000-04, and that (2) he is not entitled to depreciation deductions of$7,012 and $3,629 that he claimed on Schedules C, Profit or Loss From Business, for 2003 and 2004, respectively. [*5] . FINDINGS OF FACT Introduction Some

income SERVED APR - 3 2012 - 2 - for 2003 as a result. P claims that ifno liability existed in 2003 that no liability existed in 2001 either and R would be precluded from contesting P's 2001 return by the expiration ofthe period oflimitations under I.R.C. sec. 6501. Held: P's liability on the subscription note and related assumption agreement became nongenuine in 2003. Held, further, P must recognize a $200,000 gain for 2003 under I.R.C. sec. 465(e). Held, further, P is liable for an accuracy-re

The limitations period under section 6501 has lapsed for all years for which the Yarish ESOP was disqualified except 2004.

[Emphasis added.] 26 C.F.R. sec. 1.6001-1(e), Income Tax Regs. A taxpayer's books and records for a given tax year "may become material" for purposes ofsection 6001 as long as the period oflimitations on assessment for that year remains open under section 6501. Since the period oflimitations is still open with respect to the tax 28The record contradicts Mr. Bailey's contention that he was given no notice that the IRS might challenge his profit m tive. Revenue Agent Tabor issued five IDRs to Mr.

To add to -his woes, he received a Letter 1064 (DO) (or "Defaulted Installment s(...continued) the prescribed time under the Code (i.e., section 6501), the IRS in general has ten years to collect the assessed tax by levy.

Vallone, aMr.- Cover, and four.'other principals of Aegis were conv'icted of conspiracy to -defraud the United States in connection with their actiyities related to the promotion and marketing of fraudulent trust aschemes OPINION Section 6501.(a) provides that, generally, the« amount of any tax must abe assessed within 3 years of the filing of a' return.

nform Mr. DeVries' return to the partnership return without conducting a partnership References in the Code to tax generally include additions to tax, additional amounts and penalties. See sec. 6665. We therefore apply the limitations provisions of sec. 6501 to decide whether the deficiencies and the additions to tax were timely assessed. The parties have not shown whether HYS Investments is subject to the TEFRA partnership procedures or excepted as a small partnership under sec. 6231(a) (1) (B)

The issues for decision are: (i) Whether the mitigation provisions under sections 1311 through 1314 permit respondent to make a deficiency determination against petitioner for 2005, a year that is otherwise closed under the section 6501 3-year period of limitations; and (2) if so, whether petitioner may raise unrelated issues to offset the increase in tax therefrom.

Untimeliness of the notice o deficiency ìls an affirmative defense. Adler v. Commissioner, 85 T.C. 535, 540 (1985) .' The taxpayer must specifically p ead it. Rul 39. enland did not raise the question of timeli ess in the pleadings (or otherwise), and we do not address it. - 12 - The IRS also determined that Penco was not entitled to mo

Section 6229 sets forth -58- special rules to extend the period of limitations described by section 6501 with respect to partnership items or affected items.

Section 6503(a) (1) provides: The running of the period of limitations provided in section 6501 * * * on the making of assessments * * * - 16 - in respect of any deficiency * * * shall (after the mailing of a notice under section 6212(a)) be suspended for the period during which the Secretary is prohibited from making the assessment * * * (and in any event, if a proceeding in respect of the deficiency is placed on the docket of

Vallone, aMr.- Cover, and four.'other principals of Aegis were conv'icted of conspiracy to -defraud the United States in connection with their actiyities related to the promotion and marketing of fraudulent trust aschemes OPINION Section 6501.(a) provides that, generally, the« amount of any tax must abe assessed within 3 years of the filing of a' return.

nform Mr. DeVries' return to the partnership return without conducting a partnership References in the Code to tax generally include additions to tax, additional amounts and penalties. See sec. 6665. We therefore apply the limitations provisions of sec. 6501 to decide whether the deficiencies and the additions to tax were timely assessed. The parties have not shown whether HYS Investments is subject to the TEFRA partnership procedures or excepted as a small partnership under sec. 6231(a) (1) (B)

Vallone, aMr.- Cover, and four.'other principals of Aegis were conv'icted of conspiracy to -defraud the United States in connection with their actiyities related to the promotion and marketing of fraudulent trust aschemes OPINION Section 6501.(a) provides that, generally, the« amount of any tax must abe assessed within 3 years of the filing of a' return.

Vallone, aMr.- Cover, and four.'other principals of Aegis were conv'icted of conspiracy to -defraud the United States in connection with their actiyities related to the promotion and marketing of fraudulent trust aschemes OPINION Section 6501.(a) provides that, generally, the« amount of any tax must abe assessed within 3 years of the filing of a' return.

Section 6503(a) (1) provides: The running of the period of limitations provided in section 6501 * * * on the making of assessments * * * - 16 - in respect of any deficiency * * * shall (after the mailing of a notice under section 6212(a)) be suspended for the period during which the Secretary is prohibited from making the assessment * * * (and in any event, if a proceeding in respect of the deficiency is placed on the docket of

ministration of any internal revenue law . [Emphasis added . ] A taxpayer's books and records for a given tax year "may become material" for purposes of section 6001 so long as the period of limitations on assessment for that year remains open under section 6501 . Since the period of limitations is'still open with respect to the tax years at issue,13 Mr . Adler was required to retain his books and records with respect to those years . In this case Mr . Adler bears the burden of proof, and that b

004 taxable years, including significant amounts of time with little or no examination activity, and never reguested an extension of the statutes of limitations for any of these years." Further, the petition states: "The statute of limitations under I.R.C. § 6501 for the 2002, 2003 and 2004 taxable years had expired well prior to the time the Commissioner issued his Statutory Notice of Deficiency, on November 25, 2009." Petitioner has raised the period of limitations issue, and we presume the ma

OPINION Respondent relies on section 6501 (c) (1) as' a defense .

OPINION Respondent relies on section 6501 (c) (1) as' a defense .

004 taxable years, including significant amounts of time with little or no examination activity, and never requested an extension of the statutes of limitations for any of these years.” Further, the petition states: “The statute of limitations under I.R.C. § 6501 for the 2002, 2003 and 2004 taxable years had expired well prior to the time the Commissioner issued his Statutory Notice of Deficiency on November 25, 2009.” Petitioner has raised the period of limitations issue, and we presume the mat

If the taxpayer is properly notified before the expiration of the period of limitations for making .assessments under section 6501,5 the period of limitations for making an assessment of the trust fund recovery penalty shall not expire before the later of the date 90 days after the date th e 'Sec.

Box 39, McArthur, CA 96056-0039 ." In all of his correspondence with respondent's personnel, petitioner raised only the section 6501 issue, and he specifically indicated in a letter dated August 27, 2008, that he did not wish to pursue collection alternatives.

from assessing any tax or penalties for the tax'year at issue because the period for assessment as described in section 6501 had expired .

argues that, Colony' s interpretation of section 275(c ) of the 1934 Revenue Act is not binding because its successor statute, section 6501 ( e)(1)(A), is materially different (the materiality argument) .

66(c) must request such relief no later than 6 months before the statute of limitations on assessment of section 6501 expires with regard to the nonrequesting spouse”, id.

More fundamentally, the question of how private parties allocate the burden of the tax is different from the issue of who is liable under the Code for gift tax; the donor and the donee may shift the ultimate financial burden by agreement, for example in a net gift context, discussed below. However, such an allocation does not define or d

otal amount of $20,700 . Petitioner objects to respondent's motion for summary judgment and-contends that respondent failed to assess petitioner and hi s wife's 1999 Federal income tax liability within the assessment period of limitations set out in section 6501 . Petitioner also challenges generally the amount of his and his wife's 1999 Federal income tax liability as determined by respondent . For the reasons stated, we will grant respondent's motion for summary judgment . Background - The, fa

533, 542 (2000) ("Section 6229 provides a minimum period of time for the assessment of any tax attributable to pal!,rtnership items (or affected items) notwithstanding the perillod provided for in section 6501, which is ordinarily the ma imum period for the assessment of any tax .") ; see also G-5 Inv .

Section 6501 expressly defines the period that respondent is authorized to assess deficiencies against taxpayers . * * * The timeliness of respondent ' s examination is not an error for purposes of section 6404 ( e) . [Nerad v. Commissioner, supra . ] Moreover, congressional pronouncements and action both at the time of enactment of section 6404 (e

(h) Cases Under Title 11 of the United States Code .-- The running of the period of limitations provided in section 6501 or 6502 on the making of assessments or collection shall, in a case under title 11 of the United States Code [referring to a court action, including a Chapter 7 bankruptcy proceeding, brought under the Bankruptcy Code], be suspended for the period during which the Secretary is prohibited by reason of such case from making the assessmen

t are also prejudiced if the taxable year in which the regulatory election should have been made, or any taxable years that would have been affected by the election had it been timely made, are closed by the period of limitations on assessment under sec. 6501 before the taxpayer is granted 9100 relief. Sec. 301.9100-3(c)(1)(ii), Proced. & Admin. Regs. That provision is not a prohibition in the instant case, as the limitations periods for all taxable years affected by the election remain open. -

Statute of Limitations Petitioner argues that the statute of limitations under section 6501 bars the issuance of respondent's notice of deficiency because the notice was issued more than 3 years after petitioner's 1996 return was due.

The 3-year period of limitations under section 6501 expired with no action by respondent concerning the Thompsons’ 1982 tax return.

The 3-year period of limitations under section 6501 expired with no action by respondent concerning the Thompsons’ 1982 tax return.

The 3-year period of limitations under section 6501 expired with no action by respondent concerning the Thompsons’ 1982 tax return.

o determine one's taxable income." Petitioner also stated in his petition that Appeals Officer Owens, as an employee of the IRS, cannot be a fair and impartial representative, and that the period of limitations on collection had expired according to section 6501. On April 23, 2004, petitioner filed a petition under chapter 7 of title 11 of the United States Code (the Bankruptcy Code) with the United States Bankruptcy Court, Northern District of Alabama (the bankruptcy court). Respondent was list

Section 6501 bars sending a notice of deficiency more than 3 years after the later of (1) the date the tax return was filed, or (2) the due date of the tax return unless an exception to the three-year time limit applies. However, the Commissioner has 6 years to send the notice of deficiency if the Commissioner proves - 13 - by a preponderance of t

The 3-year period of limitations under section 6501 expired with no action by respondent concerning the Thompsons’ 1982 tax return.

the FPAA was issued more than 3 years after the partnership filed its 1999 tax return, the assessment period has expired. Petitioner argues, in essence, that section 6229 provides an assessment period that is independent of the period described in section 6501 . The Court considered and rejected this argument in Rhone-Poulenc Surfactants & Specialties, L.P . v . Commissioner , supra at 540- 541 . The Court held that sections 6229 and 6501 provide alternative periods within which to assess tax w

The 3-year period of limitations under section 6501 expired with no action by respondent concerning the Thompsons’ 1982 tax return.

The 3-year period of limitations under section 6501 expired with no action by respondent concerning the Thompsons’ 1982 tax return.

1997-535. Petitioner must make a prima facie case showing that the periods of limitation have expired by establishing the filing of the partnership returns, the expiration of the statutory periods, and the receipt or 4 Notwithstanding sec. 6229(a), sec. 6501 establishes a period of limitations for making assessments attributable to Federal income tax. While in certain cases the period of limitations under sec. 6501 may remain open even though the period of limitations has expired under sec. 622

The 3-year period of limitations under section 6501 expired with no action by respondent concerning the Thompsons’ 1982 tax return.

The 3-year period of limitations under section 6501 expired with no action by respondent concerning the Thompsons’ 1982 tax return.

The 3-year period of limitations under section 6501 expired with no action by respondent concerning the Thompsons’ 1982 tax return.

The 3-year period of limitations under section 6501 expired with no action by respondent concerning the Thompsons’ 1982 tax return.

The 3-year period of limitations under section 6501 expired with no action by respondent concerning the Thompsons’ 1982 tax return.

The 3-year period of limitations under section 6501 expired with no action by respondent concerning the Thompsons' 1982 tax return.

The 3-year period of limitations under section 6501 expired with no action by respondent concerning the Thompsons’ 1982 tax return.

t are also prejudiced if the taxable year in which the regulatory election should have been made, or any taxable years that would have been affected by the election had it been timely made, are closed by the period of limitations on assessment under sec. 6501 before the taxpayer is granted 9100 relief. Sec. 301.9100 — 3(c)(l)(ii), Proced. & Admin. Regs. That provision is not a prohibition in the instant case, as the limitations periods for all taxable years affected by the election remain open.

Section 6501 sets forth limitations on assessment and provides as a general rule that income taxes must be assessed within 3 years after the filing of the return. Sec. 6501(a). Where assessment was made within the pertinent period of limitations, the tax may be collected by levy within 10 years after the assessment of the tax. Sec. 6502(a). A heari

r application of the $6,500 in 1999 remittances by the Freijes. 18 The Court of Appeals declined to decide whether, as the Commissioner contended, he had a further option of recovering the refund through a suit begun within the limitations period of sec. 6501, without regard to sec. 7405. - 29 - 1998 Respondent has conceded that the Appeals officer's determination to proceed with the levy with respect to petitioner's 1998 liability failed to take into account $4,094 of withholding credits of Mrs

Moreover, we are satisfied that the well-pleaded facts in respondent’s answer and the deemed admissions provide an adequate factual basis for concluding that the period of limitations for assessing the 1996 liability under section 6501 has not expired.

ct to claims to the same extent such expenses would be allowable as deductions under section 2053(a)(2) if such property were subject to claims, and such amounts are paid before the expiration of the period of limita- tion for assessment provided in section 6501. Section 20.2053-8, Estate Tax Regs., provides in pertinent part: Usually, these expenses [expenses in administering property not subject to claims] are incurred in connec- tion with the administration of a trust established by a deceden

For example, taxpayers may plead the expiration of a period of limitations under section 6501 when the Commissioner fails to act within the prescribed assessment period.

s. The relevant question is not whether, as an abstract matter, the rule advocated by petitioners accords with good policy. The question we must consider is whether the policy petitioners favor is that which Congress effectuated by its enactment of §6501. Courts are not authorized to rewrite a statute because they might deem its effects susceptible of improvement. See TVA v. Hill, 437 U.S. 153, 194-195 (1978). * * * See Rath v. Commissioner, 101 T.C. 196, 200 (1993). We have noted some circumsta

Section 6501 sets forth limitations on assessment and provides as a general rule that income taxes must be assessed within 3 years after the filing of the underlying tax return. Sec. 6501(a). Section 6502(a) then specifies that where assessment was made within the pertinent period of limitations, the tax may be collected by levy within 10 years aft

Under section 6501, the period of limitations for assessment against the Form 706 filed by Sidney's estate expired on February 28, 1994, 3 years after the Form 706 was filed. Reporting the Gallery's Operations From 1990 Through 1997 Conrad and Carroll operated the gallery through the trust until November 8, 1995. As of November 8, 1995, the trust was ter

Section 6501 sets forth limitations on assessment and provides as a general rule that income taxes must be assessed within 3 years after the filing of the underlying tax return. Sec. 6501(a). Section 6502(a) then specifies that where - 12 - assessment was made within the pertinent period of limitations, the tax may be collected by levy within 10 y

Respondent is not time barred under section 6501 from collecting or assessing tax due from petitioner for 1988-89 because she did not file returns for those years.

all Rule references are to the Tax Court Rules of Practice and Procedure. Subsequent dollar amounts are rounded. 2Respondent concedes that the adjustments to petitioner's 1980 Federal income tax return are barred by the statute of limitations under sec. 6501. Petitioner concedes that he is liable for the addition to tax under sec. 6651(a)(1) on any deficiency decided by the Court for the taxable year 1981. h - 3 - FINDINGS OF FACT Some of the facts have been stipulated and are so found. The sti

not address that argument. 6 In this regard, we understand petitioner also to be asserting that he is liable for none of the interest because it relates to an addition to tax that respondent assessed after the applicable period of limitations under sec. 6501. As we have found, the addition to tax was assessed initially on Nov. 18, 1991 (approximately 1 month after petitioner filed his related return), abated on Aug. 14, 1995, and then reassessed on Oct. 25, 1999. Petitioner’s assertion, which f

ations under section 6501(a) for each of the tax years at issue has expired and respondent is precluded from assessing any underpayments in tax.1 Respondent asserts that the periods of limitations have not expired under subsections (c)(1) and (e) of section 6501. Respondent determined that all or part of the underpayments in tax of Regal and Mr. Coyle were due to fraud under section 6663(a). Thus, respondent asserts that the taxes imposed against Regal and Mr. Coyle may be assessed at any time u

. P claims the separate period of limitations relating to partnership items in sec. 6229, I.R.C., does not apply to him because he never became a partner in the partnership, and that the period of limitations for assessing nonpartnership items under sec. 6501, I.R.C., has expired. R claims we lack jurisdiction to consider P’s argument that he was not a partner, and that assessment of the deficiency is therefore timely under sec. 6229, I.R.C. Held: We have no jurisdiction to consider P’s argument

ations under section 6501(a) for each of the tax years at issue has expired and respondent is precluded from assessing any underpayments in tax.1 Respondent asserts that the periods of limitations have not expired under subsections (c)(1) and (e) of section 6501. Respondent determined that all or part of the underpayments in tax of Regal and Mr. Coyle were due to fraud under section 6663(a). Thus, respondent asserts that the taxes imposed against Regal and Mr. Coyle may be assessed at any time u

- 6 - On November 9, 2000, petitioners filed a motion to dismiss on the ground that the period of limitations for assessment under section 6501 and section 301.6501(a)-1, Proced.

from the time the tax was paid, whichever of such periods expires the later, or if no return was filed by the taxpayer, within 2 years from the time the tax was paid. * * * - 11 - further observe that there is no direct reference to section 121 in section 6501. However, paragraph (4) of section 6504, titled “Cross References”, provides: “For limitation period in case of–- * * * (4) Gain upon sale or exchange of principal residence, see section 1034(j).” D. Current Law As an epilogue to the prec

ioner’s motion follows from petitioner’s contention that the built-in gains tax is not a subchapter S item, and, thus, respondent is barred from assessing a deficiency for fiscal year 1997 because the 3-year period for assessment of tax provided by sec. 6501 has expired. Based on our holding that the built-in gains tax is a subchapter S item, the notice of deficiency for fiscal years 1996 and 1997 is invalid. A notice of S corporation administrative adjustment (FSAA) should have been issued for

Therefore, the corporation’s return does not commence the section 6501 period of assessment applicable to the dividend income received by the shareholders.

oner is required to assess a tax within 3 years after the taxpayer's return is filed. Sec. 6501(a). In the case of a tax attributable to partnership items, however, sec. 6229 sets forth special rules to extend the period of limitations prescribed by sec. 6501. Sec. 6501(o). Sec. 6229(a) provides that the period for assessing income tax attributable to a partnership item (or affected item, which includes the additions to tax determined by respondent in the instant case, sec. 301.6231(a)(5)-1T(d),

oes not raise any issue with respect to the statute of limitations, and we cannot conclude that such issue was tried by consent. See Rule 41(b). The affirmative defense of statute of limitations is not before the Court. In any event, it appears that sec. 6501 would not limit the assessment or collection of any of the tax liabilities here in issue. See sec. 6501(a), (e)(1). 2 In naming, describing, or referring to Complete Connections Trust and J&R Trust, we use the term “trust” for convenience,

- 5 - respondent’s Atlanta Service Center, together with a personal check in the amount of $1,500, agreeing with the examination report insofar as the disallowance of the deduction for gifts to family members was concerned. Petitioner’s letter and check were received by the Service Center on August 22, 1996. However, the letter was appa

Petitioner’s motion follows from petitioner’s contention that the built-in gains tax is not a subch. S item, and, thus, respondent is barred from assessing a deficiency for fiscal year 1997 because the 3-year period for assessment of tax provided by sec. 6501 has expired. Based on our holding that the built-in gains tax is a subch. S item, the notice of deficiency for fiscal years 1996 and 1997 is invalid. A notice of S corporation administrative adjustment (FSAA) should have been issued for tho

Respondent contends that, on February 18, 1997, petitioner signed a Form 872 (i.e., Consent to Extend the Time to Assess Tax) extending the limitations period relating to petitioner’s 1993 return. Respondent further contends that he lost the original Form 872. Respondent, however, offered a copy of a Form 872 that was undated and alleged

he taxpayer in Rhone-Poulenc has failed to show that the notice of deficiency issued to petitioner in this case (the notice of deficiency) was not timely issued under section 6503(a)(1) to suspend the running of the period of limitations provided in section 6501 for the assessment of a deficiency attributable to affected items requiring partner-level determinations (arguably 6 years, under the facts of this case and section 6501(e)(1)).

In their amended petition, petitioners claimed that respondent was barred under section 6501 from assessing deficiencies for 1978 and 1979.

- 5 - Discussion Under the general rule set forth in section 6501, the Internal Revenue Service is required to assess tax or send a notice of deficiency within 3 years after a Federal income tax return is filed.

Third, petitioner now claims that his previous representations were in error and seeks to change the representation on his 1988 Federal income tax return. Petitioners argue that the duty of consistency should not apply because they are innocent of any intentional wrongdoing. They contend that they did not learn that title to the ranch wa

The period for assessment against the transferor, in turn, is set forth in section 6501 and generally runs for 3 years from the filing of the tax return.

Thus, they contend that the section 6501 period of limitations was not tolled, and as a result, they are not liable for the deficiency or penalty.

he taxpayer in Rhone-Poulenc has failed to show that the notice of deficiency issued to petitioner in this case (the notice of deficiency) was not timely issued under section 6503(a)(1) to suspend the running of the period of limitations provided in section 6501 for the assessment of a deficiency attributable to affected items requiring partner-level determinations (arguably 6 years, under the facts of this case and section 6501(e)(1)).

the gross estate, to the same extent such expenses would be allowable as deductions under section 2053(a) if such property were subject to claims, and such amounts are paid before the expiration of the period of limitation for assessment provided in section 6501. Section 20.2053-8, Estate Tax Regs., provides in pertinent part with respect to the deductibility of expenses in administering property not subject to claims: Usually, these expenses are incurred in connection with the administration of

Similarly, the taxpayer may request a refund and, if denied, pursue judicial remedies. See secs. 6511, 6512, 6532, 7422. The amount of tax reported, if contested, remains contingent until a decision is reached. See Broadhead Trust v. Commissioner, T.C. Memo. 1972-196. In the instant case, petitioner filed an amended Federal income tax re

Respondent issued the notice of deficiency before the expiration of this 3-year period, which tolls the applicable assessment period. See sec. 6503. Moreover, the period of limitations is an affirmative 2Of this amount, $2,129 was for real property taxes. - 5 - defense and not a bar to jurisdiction. See Rule 39. We will deny petitioners

he price at which the property would change hands between a willing buyer and 37 Petitioners initially argued that respondent was precluded from redetermining the value of petitioners' 1986 charitable donation because the period of limitations under sec. 6501 had expired for taxable year 1986 at the time respondent issued the notices of deficiency. Petitioners make no argument regarding the statute of limitations in their briefs and appear to have conceded this point. We note, however, that peti

Specifically, this Court noted that the Commissioner’s position lacked a reasonable basis in fact and law because: (1) The Commissioner made no effort to contact the taxpayer during the 3 years allowed by section 6501 to assess tax or the 3 additional years for which the taxpayer agreed to extend the period to - 26 - assess tax by signing Forms 872-A; (2) before asking the taxpayer to consent to extending the limitations period, the Commissioner had already decided to let the statute of limitati

The current regulations, which are effective for deductions in taxable years beginning on or after January 1, 1995, but which may be used by employers claiming deductions for any taxable year not closed by the period of limitations under section 6501, read: §1.83-6.

Under this scenario, respondent concedes that petitioners' distributive share of petitioners' losses for 1989 and 1990 could not be recharacterized as passive, and, therefore, that petitioners would be entitled to refunds for those years based on the partnership-level adjustments. - 17 - TEFRA adjustments are of two varieties: Partnersh

he price at which the property would change hands between a willing buyer and 37 Petitioners initially argued that respondent was precluded from redetermining the value of petitioners' 1986 charitable donation because the period of limitations under sec. 6501 had expired for taxable year 1986 at the time respondent issued the notices of deficiency. Petitioners make no argument regarding the statute of limitations in their briefs and appear to have conceded this point. We note, however, that peti

Section 2053(b) allows a deduction for expenses of administering nonprobate property included in the gross estate if the expenses are paid prior to the expiration of the period of limitations for assessment under section 6501, and the expenses would be allowable under section 2053(a) if the property administered would have been probate property.

n the gross estate to the same extent such amounts would be allowable as a deduction under subsection (a) if such property were subject to claims, and such amounts are paid before the expiration of the period of limitation for assessment provided in section 6501. - 12 - gross estate, (b) the estate paid the costs at issue, and (c) the costs would be deductible under section 2053(a)4 if Ripplestone were a probate asset. Sec. 2053(b); Estate of Millikin v. Commissioner, 125 F.3d at 342. Rippleston

he price at which the property would change hands between a willing buyer and 37 Petitioners initially argued that respondent was precluded from redetermining the value of petitioners' 1986 charitable donation because the period of limitations under sec. 6501 had expired for taxable year 1986 at the time respondent issued the notices of deficiency. Petitioners make no argument regarding the statute of limitations in their briefs and appear to have conceded this point. We note, however, that peti

- 2 - As a matter of law, petitioner contends that respondent’s notice of deficiency in income tax to petitioner for 1986 in the amount of $375,173 is barred by the 3-year period of limitation under section 6501 and that the mitigation provisions of the Code (specifically the circumstance of adjustment described in section 1312(7)) are not applicable.

" OPINION Statutory Period of Limitations Petitioners contend that assessment of the deficiency and additions to tax that respondent determined for each of the years ended 1984 through 1988 is barred by expiration of the periods of limitations under section 6501. Respondent contends, however, that the period of limitations to assess the deficiencies and additions to tax has not expired for any year in issue. Generally, under section 6501(a) an income tax deficiency and additions to tax must be a

Section 7430(b)(1) provides in pertinent part that: "A judgment for reasonable litigation costs shall not be awarded * * * in any court proceeding unless the court determines that the prevailing party has exhausted the administrative remedies available to such party within the Internal Revenue Service." To meet this requirement, a party

this issue. Petitioners do not argue against the application to them of the self-employment tax per se, but that they did not receive the underlying unreported income. 6 Resolution of this issue will determine whether the period of limitations under sec. 6501 has expired. - 5 - During 1982 and 1983, the years in issue, petitioners were Philadelphia police officers assigned to the 5 Squad. The Philadelphia Police Department was organized on a squad system which included four line squads usually c

this issue. Petitioners do not argue against the application to them of the self-employment tax per se, but that they did not receive the underlying unreported income. 6 Resolution of this issue will determine whether the period of limitations under sec. 6501 has expired. - 5 - During 1982 and 1983, the years in issue, petitioners were Philadelphia police officers assigned to the 5 Squad. The Philadelphia Police Department was organized on a squad system which included four line squads usually c

(Generally, under section 6501, the period of limitations for assessments against a taxpayer is 3 years from the filing of the tax return.) Therefore, the period of limitations for making an assessment against Jaussaud Enterprises expired on March 5, 1996, and the Commissioner could assess petitioner’s transferee liability at any time up to March 5, 1997.

Under this scenario, respondent concedes that petitioners’ distributive share of partnership losses for 1989 and 1990 could not be re-characterized as passive, and, therefore, that petitioners would be entitled to refunds for those years based on the partnership-level adjustments. TEFRA adjustments are of two varieties: Partnership item

The current regulations, which are effective for deductions in taxable years beginning on or after January 1, 1995, but which may be used by employers claiming deductions for any taxable year not closed by the period of limitations under section 6501, read: §1.83-6.

es, 590 F.2d 68, 70-71 (3d Cir. 1978). Petitioner argues that he is entitled to a refund of all his withholding credits for his 1984 tax year because respondent failed to properly assess the tax within the statutory period of limitations provided by section 6501. However, whether or not there has been a timely assessment with respect to a specific year does not alone determine whether there has been an overpayment which would entitle a taxpayer to a refund. As the Court of Appeals for the Third

Petitioner contends that she is not liable because, having filed her 1982 Federal income tax return on October 19, 1983, the 3-year statutory period of limitations provided in section 6501 expired before issuance of the notice of deficiency.

In their petitions for 1985, petitioners assert that the period of limitations under section 6501 for assessment of tax for 1985 had expired before - 5 - respondent mailed the notices of deficiency for 1985.

In their petitions for 1985, petitioners assert that the period of limitations under section 6501 for assessment of tax for 1985 had expired before - 5 - respondent mailed the notices of deficiency for 1985.

es, 590 F.2d 68, 70-71 (3d Cir. 1978). Petitioner argues that he is entitled to a refund of all his withholding credits for his 1984 tax year because respondent failed to properly assess the tax within the statutory period of limitations provided by section 6501. However, whether or not there has been a timely assessment with respect to a specific year does not alone determine whether there has been an overpayment which would entitle a taxpayer to a refund. As the Court of Appeals for the Third

d. at 541; see American 13 For the first time in its brief, petitioner raised the statute of limitations as a defense, arguing that respondent is precluded from including entry fees and cluster home receipts received during those years now barred by sec. 6501. The defense of the statute of limitations must be affirmatively pleaded. Rule 39. It is untimely for petitioner to raise it in its brief, and we need not consider it. Brown v. Commissioner, 24 T.C. 256, 264 (1955); Rule 34(b)(4) and (5); R

Section 6501(b)(1) provides that if a return is filed before the due date, for purposes of section 6501, the return shall be considered filed on the due date.

Section 6501(b)(1) provides that if a return is filed before the due date, for purposes of section 6501, the return shall be considered filed on the due date.

espondent’s notice of deficiency for 1984 and 1985, respondent also determined that the underpayments of tax were due to fraud without which respondent’s assessment of deficiencies for 1984 and 1985 would be barred by the period of limitations under section 6501. For 1987, respondent also determined that the underpayment was due to fraud or, in the alternative, negligence. Further, for 1987, respondent determined additions to tax for substantial understatement and failure to timely file. OPINION

28, 36 (1958) (an income tax case), the Supreme Court, interpreting the meaning of this statutory language, said: We think that in enacting section 275(c) [the predecessor of section 6501] Congress manifested no broader purpose than to give the Commissioner an additional 2 [now 3] years to investigate tax returns in cases where, because of a taxpayer's omission to report some taxable item, the Commissioner is at a special disadvantage in detecting errors.

espondent’s notice of deficiency for 1984 and 1985, respondent also determined that the underpayments of tax were due to fraud without which respondent’s assessment of deficiencies for 1984 and 1985 would be barred by the period of limitations under section 6501. For 1987, respondent also determined that the underpayment was due to fraud or, in the alternative, negligence. Further, for 1987, respondent determined additions to tax for substantial understatement and failure to timely file. OPINION

espondent’s notice of deficiency for 1984 and 1985, respondent also determined that the underpayments of tax were due to fraud without which respondent’s assessment of deficiencies for 1984 and 1985 would be barred by the period of limitations under section 6501. For 1987, respondent also determined that the underpayment was due to fraud or, in the alternative, negligence. Further, for 1987, respondent determined additions to tax for substantial understatement and failure to timely file. OPINION

Section 6501(b)(1) provides that if a return is filed before the due date, for purposes of section 6501, the return shall be considered filed on the due date.

Under the general rule set forth in section 6501, the Secretary is required to assess the tax within 3 years after the taxpayer's return is filed.

Section 6501(b)(1) provides that if a return is filed before the due date, for purposes of section 6501, the return shall be considered filed on the due date.

and discharge from personal liability therefor, the Secretary (as soon as possible, and in any event within 9 months after the making of such application, or, if the application is made before the return is filed, then within 9 months after the return is filed, but not after the expiration of the period prescribed for the assessment of the tax in section 6501) shall notify the executor of the amount of the tax.

, published Nov. 28, 1990. For the first time in its brief, petitioner raised the statute of limitations as a defense, arguing that respondent is precluded from including entry fees and cluster home receipts received during those years now barred by sec. 6501. The defense of the statute of limitations must be affirmatively pleaded. Rule 39. It is untimely for petitioner to raise it in its brief, and we need not consider it. Brown v. Commissioner, 24 T.C. 256, 264 (1955); Rule 34(b)(4) and (5), R

Section 6501(b)(1) provides that if a return is filed before the due date, then for purposes of section 6501, the return shall be considered filed on the due date.