Richard K. and Marilyn J. Phillips - Page 11




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               Section 301.6231(c)-5T, Temporary Proced. & Admin. Regs., 52           
          Fed. Reg. 6793 (Mar. 5, 1987),12 was promulgated by the Secretary           
          pursuant to section 6231(c)(2) and (3) and provides for the                 
          treatment of partnership items of a partner who is the subject of           
          a criminal tax investigation as follows:                                    
               The treatment of items as partnership items with                       
               respect to a partner under criminal investigation for                  
               violation of the internal revenue laws relating to                     
               income tax will interfere with the effective and                       
               efficient enforcement of the internal revenue laws.                    
               Accordingly, partnership items of such a partner                       
               arising in any partnership taxable year ending on or                   
               before the last day of the latest taxable year of the                  
               partner to which the criminal investigation relates                    
               shall be treated as nonpartnership items as of the date                
               on which the partner is notified that he or she is the                 
               subject of a criminal investigation and receives                       
               written notification from the Service that his or her                  
               partnership items shall be treated as nonpartnership                   
               items.  The partnership items of a partner who is                      
               notified that he or she is the subject of a criminal                   
               investigation shall not be treated as nonpartnership                   
               items under this section unless and until such partner                 
               receives written notification from the Service of such                 
               treatment.                                                             
               Generally, there is a 3-year period of limitations on the              
          assessment of a tax attributable to any partnership item.  And,             
          generally, the issuance of an FPAA will suspend the period of               
          limitations.  See, e.g., sec. 6229(d).                                      



          12   These temporary regulations apply to partnership taxable               
          years beginning after Sept. 3, 1982.  See 52 Fed. Reg. 6779 (Mar.           
          5, 1987).                                                                   








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