- 5 -
had all the Schedules K-1 for tax year 1983 but was never able to
procure all of the Schedules K-1 for 1984.6
During the period April 1, 1985, through August 1987, there
was never a time when no work was being done on the TLP file.
Agent McBrien never received any complaints from any of the
limited partners or TLP's representatives regarding the speed of
the examination. At the conclusion of his examination, Agent
McBrien determined that all R&D losses for tax years 1983 and
1984 should be disallowed, but that no penalties should be
determined. With an attached cover letter dated March 24, 1987,
Agent McBrien sent Mr. Reising a tentative position paper
proposing to disallow the R&D expenses claimed for 1983. Agent
McBrien then contacted the tax matters partner and Mr. Reising
about setting a time for a closing conference. The date of the
closing conference is unknown. By August or September 1987,
Agent McBrien finished his examination of TLP. Complete
agreement was not reached and the case was ultimately sent to
Appeals to resolve the remaining disputed issues.
6 Obtaining the 1984 Schedules K-1 was necessary because the
TLP audit involved a series of transactions straddling the 1983
and 1984 taxable years. It was not prudent to conduct a separate
audit for each of those 2 taxable years because the series of
transactions was part of the larger issue of whether the R&D
expenses were deductible.
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