U.R. Neely - Page 5




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            3-year period of limitations under section 6501(a)7 does not                               
            apply in this case.  Respondent alleges that petitioner’s failure                          
            to pay employment taxes with respect to amounts paid to the                                
            workers during 1992 constituted (1) a willful attempt by                                   
            petitioner to defeat or evade employment taxes and (2) fraud with                          
            an intent to evade tax.  Accordingly, respondent contends that                             
            the period of limitations in this case remains open pursuant to                            
            either section 6501(c)(1) or section 6501(c)(2).                                           
                  Prior to trial, the parties entered into a stipulation of                            
            facts in which petitioner stipulated that the workers were                                 
            employees of the company during 1992 and that petitioner does not                          
            qualify for relief under section 530 of the Revenue Act of 1978,                           
            Pub. L. 95-600, 92 Stat. 2763, 2855.8  The matter for decision at                          


                  7  Sec. 6501(a) provides that, with respect to any tax                               
            imposed by the Internal Revenue Code, “no proceeding in court                              
            without assessment for the collection of such tax shall be begun”                          
            following the expiration of the applicable period of limitations.                          
            See also sec. 301.6501(a)-1(b), Proced. & Admin. Regs.  As a                               
            general rule, the period of limitations expires after 3 years                              
            from the date on which the relevant tax return is filed.  See                              
            sec. 6501(a).  Various exceptions to the 3-year period are found                           
            in sec. 6501, including an unlimited limitations period under                              
            sec. 6501(c)(1) for cases in which the filed return was false or                           
            fraudulent with an intent to evade tax.  See also sec.                                     
            301.6501(c)-1(a), Proced. & Admin. Regs.                                                   
                  8  That petitioner now concedes the merits of respondent’s                           
            determination does not deprive the Court of jurisdiction.  As we                           
            stated in the income tax context in Hannan v. Commissioner, 52                             
            T.C. 787, 791 (1969): “it is not the existence of a deficiency                             
            but the Commissioner’s determination of a deficiency that                                  
            provides a predicate for Tax Court jurisdiction. * * *  Indeed,                            
            were this not true, then the absurd result would be that in every                          
            case in which this Court determined that no deficiency existed,                            
                                                                         (continued...)                




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