Walton A. Sutherland - Page 11

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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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