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OPINION
The sole matter for determination is whether the period of
limitations on assessment expired prior to the issuance of
respondent’s notice of determination. Petitioner contends that
the assessment of any additional employment tax liability is
barred by the statute of limitations under section 6501, as the
notice of determination was issued after the general 3-year
period of limitations provided by section 6501(a). Respondent,
on the other hand, contends that the general limitations period
under section 6501(a) does not apply in this case. Respondent
claims that the employment tax returns at issue were false and
fraudulent with an intent to evade tax and that the period of
limitations thereby remains open pursuant to section 6501(c)(1).7
Accordingly, whether respondent’s notice of determination was
timely issued depends on whether petitioner committed fraud in
the filing of the employment tax returns.
This is the first instance in which this Court has been
called upon to determine whether a taxpayer committed fraud in
the employment tax context. Nonetheless, the determination of
fraud for purposes of the period of limitations on assessment
7 Respondent also alleged in his answer that the failure of
petitioner to reflect the cash payments to the workers on the
appropriate employment tax returns constituted a willful attempt
by petitioner to defeat or evade employment taxes, justifying an
indefinite extension of the period of limitations pursuant to
sec. 6501(c)(2). However, respondent neither argued this point
at trial nor raised it in the course of the posttrial briefing.
Accordingly, we treat this argument as having been withdrawn.
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Last modified: May 25, 2011