Estate of James T. Callaway, Deceased, Elizabeth N. Callaway, Executrix, and Elizabeth N. Callaway - Page 11

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          petitioners' "conversion" theory and period of limitations                  
          arguments seem logical at first glance, closer scrutiny reveals             
          that, if petitioners' conversion theory is correct with respect             
          to both decedent and Mrs. Callaway, it follows that the Court               
          lacks jurisdiction on the ground that the notices of deficiency             
          for affected items are invalid.                                             
               It is well settled that allegations concerning the period of           
          limitations constitute an affirmative defense, not a plea to the            
          jurisdiction of this Court.  Saso v. Commissioner, 93 T.C. 730,             
          734-735 (1989); see Columbia Bldg., Ltd. v. Commissioner, 98 T.C.           
          607, 611-612 (1992).  Further, the Court has long held that,                
          where the Court's jurisdiction and the period of limitations are            
          both disputed issues in a case, we are obliged to resolve first             
          whether the Court has jurisdiction.  King v. Commissioner, 88               
          T.C. 1042, 1050 (1987), affd. on other grounds 857 F.2d 676 (9th            
          Cir. 1988).  A jurisdictional issue can be raised by either party           
          or the Court sua sponte at any stage of the proceedings.  Smith             
          v. Commissioner, 96 T.C. 10, 13-14 (1991).                                  
               As explained in greater detail below, if we agree with                 
          petitioners' conversion theory, the notices of deficiency for               
          affected items are invalid thereby rendering petitioners' period            
          of limitations argument moot.  On the other hand, if we reject              
          petitioners' conversion theory, the notices of deficiency for               
          affected items are valid, and petitioners' period of limitations            





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