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contest the taxpayer's deductions. The making of the
election extends the statute of limitations on any year
in the suspension period to at least two years after
the due date of his return for the last year in the
period. (The due date is to be determined without
regard to extensions of time to file his return for the
last year.)
The taxpayer's limited waiver of the statute of
limitations would include not only the section 183
issue itself but also related deductions, etc., which
depend on adjusted gross income and which might be
affected if the deductions are disallowed in accord
with section 183.
The provision for this limited waiver is not
intended to affect the scope or duration of any general
waivers of the statute of limitations which taxpayers
have signed (or sign) before the date of enactment of
this bill.
Similarly, the bill does not affect general
waivers of the statute of limitations which may be
signed after enactment, since in order to avoid two
controversies relating to overall income tax liability
for the same year, a taxpayer may wish to postpone a
resolution of non-section 183 issues until the
information relating to the section 183 presumption is
available. [S. Rept. 94-938 (Part I), supra at 68-69,
1976-3 C.B. (Vol. 3) at 106-107; fn. refs. omitted;
emphasis added.]
This legislative history explains that the section 183(e)
election "automatically" extends the statutory period for
"assessment of any deficiency" attributable to the activity,
applies "only with regard to deductions which might be
disallowed", "allows the Service" additional time "in which to
contest the taxpayer's deductions" regarding the activity, and
describes the extension pursuant to section 183(e) as "The
taxpayer's limited waiver of the statute of limitations". In
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