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to assess ‘at any time’ the tax for a year in which the taxpayer
has filed ‘a false or fraudulent return’”. Badarracco v.
Commissioner, 464 U.S. 384, 396 (1984). Section 6501(c)(1) would
literally apply to a partner whose individual or corporate return
was fraudulent regardless of whether the partnership return was
fraudulent. Section 6501(c)(1) allows for an unlimited period
for assessing any tax for the year in which a fraudulent return
was filed regardless of whether some of the tax may be due to
nonfraudulent items. See Lowy v. Commissioner, 288 F.2d 517 (2d
Cir. 1961), affg. T.C. Memo. 1960-32; Colestock v. Commissioner,
102 T.C. 380 (1994). Thus, if section 6501(c)(1) applies to a
particular taxable year, it clearly permits an open-ended period
for any assessment of tax even if part of the assessment was
based on nonfraudulent partnership items.
Section 6229(c)(1) deals specifically with partnership
returns. It extends the period of limitations with respect to
the partners if a partner, with intent to evade tax, signs or
participates in the preparation of a fraudulent partnership
return. Unlike section 6501(c)(1), section 6229(c)(1) applies
only to tax attributable to partnership items or affected items.
For a partner signing or participating in the preparation of a
fraudulent partnership return, the period for assessing tax
attributable to partnership items is unlimited, notwithstanding
that the fraud does not result in a reduction of that partner’s
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