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Petitioner contends that the 1990 Federal income tax return
and the Federal income tax returns of the partnerships that were
conveyed supplied respondent with a clue as to the nature and
amount of gain that was omitted from the Western return, and,
thus, the 6-year period of limitations under section 6229(c)(2)
does not apply. Petitioner concedes that the omitted gain from
the sale of the partnership interests exceeds 25 percent of the
amount of gross income stated in the 1990 Federal income tax
return of Western.
Respondent argues that neither the 1990 return nor the
returns of the partnerships that were conveyed provide adequate
disclosure, and, therefore, the 6-year period of limitations is
applicable. Respondent concedes that the Federal income tax
returns of the partnerships that were conveyed should be
considered along with the 1990 tax return of Western for purposes
of determining whether an adequate disclosure has been made. See
Walker v. Commissioner, 46 T.C. 630, 637-638 (1966).
In Colony, Inc. v. Commissioner, 357 U.S. 28, 37 (1958), the
Supreme Court, although interpreting section 275(c), I.R.C. 1939,
the predecessor of section 6501(e), specifically stated that the
result that it reached is in harmony with the language of section
6501(e)(1)(A):
We think that in enacting section 275(c) Congress
manifested no broader purpose than to give the
Commissioner an additional 2 years [now 3] to
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