Oliver K. Robinson and Deborah L. Robinson, et al. - Page 10




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         We have reached that conclusion irrespective of whether the                  
         adjustment concerned the transactions of another entity and                  
         irrespective of whether that entity was taxable.                             
              Around 1989-90, a conflict arose amongst Federal Courts of              
         Appeals over whether a passthrough corporate entity’s or a                   
         shareholder’s period for assessment controlled the Commissioner’s            
         ability to determine a deficiency for an item flowing from the               
         corporation to the shareholder.  In Bufferd v. Commissioner, 506             
         U.S. 523 (1993), the Supreme Court addressed that conflict in the            
         context of a subchapter S corporation and its shareholder.  In               
         Bufferd, it was held that adjustments to a shareholder’s income              
         are governed by the shareholder’s period for assessment.                     
              B.  Caselaw Development                                                 
              Petitioners and respondent each focus on the Supreme Court’s            
         holding in Bufferd v. Commissioner, supra, to support their                  
         positions.  Respondent contends that Bufferd, even though it                 
         involves a shareholder and an S corporation, stands for the                  
         general principle that it is the taxpayer’s return that controls             
         the assessment period and not the return of the entity from which            
         the adjustment may be derived.  Conversely, petitioners contend              
         that Bufferd is distinguishable and applies solely to S                      
         corporations and, accordingly, does not control situations where             
         the adjustment involves a shareholder and a C corporation.                   
              The Supreme Court in resolving the circuit conflict held                






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