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fiscal years 1996 and 1997.6 Accordingly, we will grant
respondent’s motion to dismiss and to strike as to petitioner’s
fiscal years 1996 and 1997.
In view of the foregoing,
An appropriate order will
be issued.
6 Petitioner did not agree to extend the time to assess tax
for fiscal year 1997; however, the tax matters person agreed on
behalf of the shareholders to extend the time to assess tax for
that year. Petitioner filed a motion to dismiss for lack of
jurisdiction as to fiscal year 1997, in which petitioner contends
that respondent is barred from assessing a deficiency for fiscal
year 1997 because respondent mailed the notice of deficiency more
than 3 years after petitioner filed its fiscal year 1997 return.
Petitioner’s motion follows from petitioner’s contention that the
built-in gains tax is not a subchapter S item, and, thus,
respondent is barred from assessing a deficiency for fiscal year
1997 because the 3-year period for assessment of tax provided by
sec. 6501 has expired. Based on our holding that the built-in
gains tax is a subchapter S item, the notice of deficiency for
fiscal years 1996 and 1997 is invalid. A notice of S corporation
administrative adjustment (FSAA) should have been issued for
those years.
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