Charles A. Nerad - Page 7




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               Petitioner's argument that the IRS failed to examine his               
          return promptly in light of the statement on the return is                  
          without merit.  We have previously held that this Court is not at           
          liberty to modify a period of time prescribed by a statute of               
          limitations in which the Commissioner is authorized to act.  See            
          Foster v. Commissioner, 80 T.C. 34, 229 (1983), affd. in part and           
          vacated in part on another issue 756 F.2d 1430 (9th Cir. 1985);             
          Saigh v. Commissioner, 36 T.C. 395, 424-425 (1961).  Section 6501           
          expressly defines the period that respondent is authorized to               
          assess deficiencies against taxpayers.  Petitioners filed their             
          1992 Federal income tax return on April 15, 1993.  Respondent               
          issued the notice of deficiency on October 18, 1995.  Since the             
          latter date is within the 3 years of the former, the notice of              
          deficiency was timely under section 6501(a).  The timeliness of             
          respondent's examination is not an error for purposes of section            
          6404(e).5                                                                   



          5    Sec. 6404(g) provides for a suspension of the imposition of            
          interest if the taxpayer timely files a return and the Secretary            
          fails to provide the taxpayer with notice of liability and a                
          basis for the liability before the close of the 1-year period               
          (18-month period in the case of taxable years beginning before              
          Jan. 1, 2004) beginning on the later of (1) the date on which the           
          return is filed; or (2) the due date of the return without regard           
          to extensions. See sec. 6404(g).  Sec. 6404(g) was added to the             
          Code by sec. 3305(a) of the Internal Revenue Service                        
          Restructuring and Reform Act of 1998, Pub. L. 105-206, 112 Stat.            
          685, 743 (1998).  Sec. 6404(g) is effective for tax years ending            
          after July 22, 1998.  Therefore, sec. 6404(g) does not apply to             
          this case.                                                                  






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