116 T.C. No. 4
UNITED STATES TAX COURT
RIDGE L. HARLAN AND MARJORY C. HARLAN, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
THEODORE S. OCKELS AND ROSEMARIE G. OCKELS, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 21214-92, 24609-92. Filed January 17, 2001.
Ps are partners in partnerships (the 1st-tier
partnerships); some of the 1st-tier partnerships are
partners in other partnerships (the 2d-tier partnerships).
R maintains that the 6-year period of limitations under sec.
6501(e)(1)(A), I.R.C. 1986, applies to notices of deficiency
sent in 1992 with respect to Ps’ 1985 tax year. In
determining the applicability of sec. 6501(e)(1)(A), I.R.C.
1986, R includes in Ps’ “gross income stated in the return”
Ps’ distributive shares of the gross incomes of the 1st-tier
partnerships, but does not take account of the 1st-tier
partnerships’ distributive shares of the gross incomes of
the 2d-tier partnerships. Ps contend to the contrary.
Held: In determining the amount of “gross income
stated in the return” (the denominator in the 25-percent
test of sec. 6501(e)(1)(A), I.R.C. 1986) for petitioners,
the 2d-tier partnerships’ information returns are treated as
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