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Statute of Limitations
The parties' dispute regarding the applicable statute of
limitations poses a classic conflict of laws problem. Texas Civ.
Prac. & Rem. Code Ann. sec. 16.051 (West 1997), provides: “Every
action for which there is no express limitations period, except
an action for the recovery of real property, must be brought not
later than four years after the day the cause of action accrues.”
Petitioner contends that the underlying cause of action, i.e.,
the validity of the durable power of attorney, accrued on or
about January 17, 1992--the date Ms. Cade revoked the durable
power of attorney--and that the notice of deficiency in this case
was issued well over 4 years after that date. Petitioner
maintains that respondent should not be permitted to challenge
the validity of the durable power of attorney in this case where
the validity of the durable power of attorney is no longer
subject to challenge under State law.
Respondent counters that the notice of deficiency in this
case was issued to petitioner in compliance with the statute of
limitations set forth in the Internal Revenue Code. Section
6501(a) provides in pertinent part:
SEC. 6501(a). General Rule.-–Except as otherwise
provided in this section, the amount of any tax imposed
by this title shall be assessed within 3 years after
the return was filed (whether or not such return was
filed on or after the date prescribed) * * *.
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Last modified: May 25, 2011