- 18 - Of particular relevance to the instant case is section 301.6404-2T(b)(2), Example (3), Temporary Proced. & Admin. Regs., supra, which provides the following: A taxpayer invested in a tax shelter and reported a loss from the tax shelter on the taxpayer's income tax return. Internal Revenue Service personnel conducted an extensive examination of the tax shelter, and the processing of the taxpayer's case was delayed during such examination. Because the period of limitations on assessment was about to expire, the taxpayer executed a consent to extend the period of limitations. The time required to process the taxpayer's case was not a result of a delay in performing a ministerial act; consequently, interest attributable to this period cannot be abated * * *. Example 3 was neither incorporated into the final regulations nor cited by respondent in the instant case, although it appears to be applicable to the instant case.10 TLP's tax matters partner and its attorney executed a Form 872-O extending the period of limitations indefinitely. Although the Form 872-O was never revoked or terminated for the duration of the examination, review, and appeal of the TLP case, we do not interpret Example 3 so broadly as to conclude that the parties' extension of the period of limitations means that respondent could not commit an error or delay in performing a ministerial act during that period. We conclude that, even where an extension of the period of limitations is granted, there may be instances where an error or delay by an officer or employee of the IRS in performing a ministerial act may present a 10 See supra note 9.Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: May 25, 2011