CC&F Western Operations Limited Partnership, CC&F Investors, Inc., Tax Matters Partner - Page 5




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                                     Discussion                                       
               Under the general rule set forth in section 6501, the                  
          Internal Revenue Service is required to assess tax or send a                
          notice of deficiency within 3 years after a Federal income tax              
          return is filed.  See sec. 6501(a).  In the case of a tax imposed           
          on partnership items, however, section 6229 sets forth special              
          rules to extend the period of limitations prescribed by section             
          6501 in situations where the partnership tax return was filed               
          later than an individual partner’s return.  See sec. 6501(o)(2);            
          Rhone-Poulenc Surfactants & Specialties v. Commissioner, 114 T.C.           
          533, 540 (2000).                                                            
               Section 6229 provides in pertinent part:                               
                    SEC. 6229(a).  General Rule.--Except as otherwise                 
               provided in this section, the period for assessing any                 
               tax imposed by subtitle A with respect to any person                   
               which is attributable to any partnership item (or                      
               affected item) for a partnership taxable year shall not                
               expire before the date which is 3 years after the later                
               of--                                                                   
                         (1) the date on which the partnership return                 
                    for such taxable year was filed, or                               
                         (2) the last day for filing such return                      
                    for such year (determined without regard to                       
                    extensions).                                                      
                           *    *    *    *    *    *    *                            
                    (c) Special Rule in Case of Fraud, Etc.--                         
                           *    *    *    *    *    *    *                            
                         (2) Substantial omission of income.--If any                  
                    partnership omits from gross income an amount                     





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