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stipulated that, other than the nontaxable sources agreed to
above and the contested cash gift, there are no other possible
nontaxable sources for the amounts omitted from petitioner's
returns for 1989 and 1990.
OPINION
We must decide whether certain of petitioner's bank deposits
and cash expenditures constitute unreported gross income in
excess of 25 percent of the amount of gross income stated in
petitioner's return, so that assessment and collection of income
tax thereon is not barred by reason of the 6-year period of
limitations provided by section 6501(e)(1)(A). If assessment and
collection is not so barred, we must also decide whether the
unreported bank deposits and cash expenditures made by petitioner
constitute self-employment income subject to tax pursuant to
section 1401 for 1989 and 1990. We must also decide whether
petitioner is liable for accuracy-related penalties for
negligence pursuant to section 6662(a) for those taxable years.
I. Does the Period of Limitations Bar Respondent's Assessment of
Deficiencies for 1989 and 1990?
Generally, no deficiency in income tax may be assessed or
collected more than 3 years after the return is filed. Sec.
6501(a). In the instant case, there is no dispute that the
deficiency notice was mailed to petitioner after the expiration
of the 3-year period of limitations, but within the 6-year period
of limitations.
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