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Ockels before respondent issued the respective notices of
deficiency.
Respondent contends that the instant cases fall within an
exception to the 3-year rule--the 6-year statute of limitations
set forth in section 6501(e)(1)(A)--because each set of
petitioners has omitted from gross income more than “25 percent
of the amount of gross income stated in the return” for that set
of petitioners.
Petitioners contend that the income that respondent contends
was omitted from their 1985 tax returns6 is less than 25 percent
of the amounts of gross income stated in their respective tax
returns because (1) their tax returns are treated as having set
forth their shares of the gross incomes set forth on the
information returns of their 1st-tier partnerships and (2) the
information returns of their lst-tier partnerships should be
treated as setting forth their 1st-tier partnerships’ respective
shares of the gross incomes set forth on the information returns
of their 2d-tier partnerships.
Respondent argues that the 2d-tier partnerships’ information
returns are to be ignored because (1) “The plain language of the
Code and the regulations” require consideration of only
6The question of whether petitioners omitted any gross
income--whether the 1985 conversions of the Velobind stock
produced gross income and, if so, then in what amounts--has been
set aside for determination at a later date.
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