- 22 -
Based on all the evidence, we find that respondent has
failed to prove by clear and convincing evidence that petitioner
intended to evade taxes known to be owing by conduct intended to
conceal, mislead, or otherwise prevent the collection of taxes.
We hold that petitioner is not liable for the fraud penalty under
section 6663(a) for any of the years at issue.
Issue V. Whether the Assessment and Collection of a Deficiency
for the 1990 Taxable Year Is Barred by the Statute of Limitations
Petitioner asserts that the 3-year period of limitations
bars respondent's assessment of the deficiency for the 1990
taxable year. Respondent contends that petitioner filed a false
or fraudulent return for the 1990 year, and therefore, under
section 6501(c)(1), the tax may be assessed at any time. Since
we have found no fraud, the section 6501(c)(1) exception to the
3-year period of limitations does not apply.
Respondent alternatively contends that section 6501(e)(1)(A)
applies to extend the limitations period for the 1990 taxable
year to 6 years. Petitioner concedes that the notice of
deficiency was issued within the 6-year period.
Section 6501(e)(1)(A) provides that "If the taxpayer omits
from gross income an amount properly includible therein which is
in excess of 25 percent of the amount of gross income stated in
the return, the tax may be assessed * * * at any time within 6
years after the return was filed." For purposes of the 6-year
limitations period, in the case of a trade or business, the term
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011