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or any allocation between capitalized and deductible expenses
relating to the properties.
In their agreement to settle the 1989 Fong case, petitioner
and respondent did not enter into a closing agreement under
section 7121. Further, petitioner and respondent did not agree
that the settlement agreement reached in the 1989 Fong case would
be treated as a final determination for purposes of the
mitigation provisions of the Code, nor did petitioner and
respondent agree that the effect of the settlement of the 1989
Fong case would be to open up, under the mitigation provisions,
the period of limitations with regard to petitioner’s 1986 year.
Despite the fact that the general 3-year period of
limitations under section 6501(a) for respondent to assess a
deficiency against petitioner with respect to 1986 expired on
April 15, 1990 (3 years after the filing, on or before April 15,
1987, of petitioner's 1986 Federal income tax return), on
December 20, 1995, respondent mailed to petitioner a notice of
deficiency determining a $375,173 increase in petitioner’s 1986
Federal income tax liability. At the time the petition was
filed, petitioner resided in Sacramento, California.
Respondent’s notice of deficiency against petitioner for
1986 is based on respondent’s determination that the Court's
decision in the 1989 Fong case that was entered on March 30,
1995, constituted a determination under the mitigation provisions
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