Wiley L. Barron, CPA, Ltd. - Page 12




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                                     Discussion                                       
          Issue 1: Statute of Limitations6                                            
               Petitioner contends that assessment and collection of any              
          additional employment tax liability for the taxable periods in              
          issue is barred by the statute of limitations.  We disagree for             
          the following reasons.                                                      
               As a general rule, section 6501(a) requires that any tax be            
          assessed within 3 years after the return was filed.  Section                
          6501(b) sets forth rules providing when a return is deemed to               
          have been filed.                                                            
               As applicable herein, in the case of FUTA taxes reportable             
          on Form 940, a return is due on or before January 31 of the year            
          following the calendar year for which the return is required.               
          See sec. 6071(a); sec. 31.6071(a)-1(c), Employment Tax Regs.  See           
          also sec. 31.6011(a)-3, Employment Tax Regs., regarding the                 
          requirement for filing such a return.  However, in case of an               
          early return, the return is deemed to have been filed on the last           
          day prescribed therefor.  See sec. 6501(b)(1).                              


               6  At the time of trial, as well as when the posttrial                 
          briefs were filed, the Court had not yet decided whether issues             
          related to the statute of limitations were cognizable in an                 
          action for redetermination of employment status.  Subsequently,             
          it was decided that when the jurisdiction of the Court has been             
          properly invoked pursuant to sec. 7436, the Court may properly              
          decide whether the issuance of the Commissioner’s notice of                 
          determination is barred by the expiration of the period of                  
          limitations under sec. 6501.  See Neely v. Commissioner, 115 T.C.           
          287 (2000).                                                                 





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