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OPINION
I. Introduction
A. Questions for Decision
The principal question we have been asked to decide is
whether petitioner underreported his income for 1987, 1988, or
1989. We have found that petitioner failed to report an item of
gross income in the amount of $408,318 received in 1987. Based
on respondent's concession that the notices of deficiency for
1987, 1988, and 1989 are to be considered in the alternative, and
given that we will sustain respondent's determination of a
deficiency for 1987 in full, we determine that there are no
deficiencies in tax, additions to tax, or penalties for 1988 or
1989. We shall enter decisions accordingly. We must still
address two motions made by petitioner and determine whether
petitioner is liable for respondent's addition to tax for 1987.
II. Motions
A. Motion To Dismiss Based on Period of Limitations
At trial, petitioner orally moved to dismiss in petitioner's
favor with respect to 1987. We did not then rule on petitioner's
motion. Petitioner claims that the 3-year period of limitations
on assessment and collection with respect to that year had
expired. We note that the statute of limitations is an
affirmative defense and does not affect the jurisdiction of this
Court. Rule 39; Badger Materials, Inc. v. Commissioner, 40 T.C.
1061, 1063 (1963). Were we to agree with petitioner’s argument,
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Last modified: May 25, 2011