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effectively extended the assessment period. Petitioner contends
that the general partner, who executed the consent, was not
authorized to do so and that the consent is of no effect.
Respondent contends that the general partner was authorized to
execute the consent, thereby extending the period for assessment.
Alternatively, respondent argues that, even if the executing
general partner was unauthorized, petitioner is equitably
estopped from now asserting that the general partner lacked
authority.
Background
Cascade Partnership (Cascade) was formed under the Uniform
Partnership Act of the State of Washington, Wash. Rev. Code sec.
25.04 (West 1969), on November 9, 1982, by 20 individuals. Each
of Cascade’s 20 partners was also a partner in Price Waterhouse,
a certified public accounting partnership that also specializes
in tax matters. John R. Walsh, Jr. (Walsh), who also was a Price
Waterhouse partner but not a partner of Cascade, was the promoter
of Cascade. Walsh promoted partnership interests to James M.
Costello (Costello) and 19 other partners of Price Waterhouse.
Walsh was appointed by the 20 partners to manage Cascade by means
of the following partnership language:
The partners appoint John R. Walsh, Jr., as the manager
who shall have all the rights to manage the partnership
assets including designating an agent to serve under
his direction. He shall not be liable for any loss or
diminution of the partnership’s assets unless due to
his gross negligence, misconduct or lack of good faith.
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