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Held: Sec. 301.6245-1T, Temporary Proced. & Admin.
Regs., is valid.
Held, further, the built-in gains tax imposed
under sec. 1374, I.R.C., is a subchapter S item that
must be determined in a unified audit and litigation
procedure for an S corporation.
Michael A. Guariglia, for petitioner.
Julia A. Cannarozzi, for respondent.
OPINION
COLVIN, Judge: Respondent determined that petitioner is
liable for built-in gains tax of $574,000 for fiscal year 1996,1
$914,334 for fiscal year 1997, and $220,156 for fiscal year 1998,
and for accuracy-related penalties under section 6662(a) of
$114,800 for fiscal year 1996, $182,867 for fiscal year 1997, and
$44,031 for fiscal year 1998. Petitioner has been an S
corporation since 1993.
This matter is before the Court on respondent’s motion to
dismiss for lack of jurisdiction as to fiscal years 1996 and
1997.
Respondent contends that the notice of deficiency is invalid
as to fiscal years 1996 and 1997 and prohibited by sections 6225
and 6244 for those years because the proposed built-in gains tax
for which respondent determined petitioner is liable under
1 Petitioner used a fiscal year ending Feb. 29, 1996, and
Feb. 28, 1997 and 1998.
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