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Request (Form 4564), requesting financial and partnership
information, was sent along with the February 27, 1985, letter.
Cascade’s partnership return for 1982 was signed on behalf
of the partnership by Costello as a general partner. It was also
signed by Walsh as preparer. Initially, respondent’s agent dealt
and corresponded with Walsh in connection with Cascade’s audit.
In a June 12, 1985, letter to Walsh at Price Waterhouse,
respondent’s agent confirmed a July 1985 appointment with Walsh
and indicated that the examination would be limited to inspecting
certain requested records and verifying each partner’s Cascade
basis. In that letter, the agent pointed out that Cascade was a
pass-through partnership that would most likely be placed in
suspense until the examination of Wall Street was completed.
From the correspondence, it appears that respondent’s agent
believed that Walsh was authorized to represent Cascade.
After receiving notice that the period for assessment would
soon expire, respondent’s agent sent a letter dated January 22,
1986, to Cascade, in care of Walsh, attaching a Special Consent
to Extend the Time to Assess Tax Attributable to Items of a
Partnership (Form 872-O) and requesting its execution to extend
the assessment period. After receipt of the Form 872-O, Walsh,
realizing that he was not a partner of Cascade, contacted
Costello, the only partner of Cascade who worked in close
approximation to Walsh at Price Waterhouse. Walsh advised
Costello that a partner of Cascade had to sign the Form 872-O,
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