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extended when the taxpayer makes the election; i.e., the taxpayer
consents. In effect, the Congress authorized the Secretary to
set any appropriate conditions for a specialized extension of the
limitation on assessment, prescribed in the statute the nature
and extent of this extension, required the Secretary to offer
this agreement to any taxpayer on a take-it-or-leave-it basis,
and mandated that the Secretary agree; i.e., "consent", to the
taxpayer's election.
Thus, the Congress' mandate satisfies the requirement of
section 6501(c)(4) that the IRS "consent", and the requirement in
section 301.6501(c)-1(d), Proced. & Admin. Regs., that the IRS
execute the agreement. In short, a section 183(e) election meets
the requirements of a section 6501(c)(4) agreement and the period
of limitation for overpayments is extended pursuant to section
6511(c).
II. The Legislative History Supports This Analysis.
Section 183 was enacted by the Tax Reform Act of 1969, Pub.
L. 91-172, sec. 213, 83 Stat. 487, 571-572, to deal with "hobby
losses"; i.e., losses in an activity not engaged in for profit.
Section 183(d) provided a presumption that an activity is engaged
in for profit if a gross income test is satisfied for 2 out of 5
consecutive years. The time periods were modified by later
statutes. Special rules were provided for certain horse-related
activities. The Congress then became aware of a problem in
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