- 13 - entity was reversed by the Court of Appeals for the Ninth Circuit. Kelley v. Commissioner, 877 F.2d 756 (9th Cir. 1989), revg. and remanding T.C. Memo. 1986-405. In that case, the court held that the Commissioner could not adjust a shareholder’s return on the basis of an adjustment to an S corporation’s return when the statute had run on the corporation’s tax year.9 The rationale underlying that appellate opinion was that the section 6501(a) 3-year period for assessment was to be applied at the “source entity” level (S corporation). This Court and some Courts of Appeals agreed with the Commissioner’s position that the relevant return for determining whether the period for assessment had expired under section 6501(a) is that of a taxpayer against whom the Commissioner has determined a deficiency. Fehlhaber v. Commissioner, 94 T.C. 863, 868 (1990) (S corporation), affd. 954 F.2d 653 (11th Cir. 1992); Bufferd v. Commissioner, T.C. Memo. 1991-170 (S. corporation), affd. 952 F.2d 675 (2d Cir. 1992), affd. 506 U.S. 523 (1993); Siben v. Commissioner, T.C. Memo. 1990-435 (partnership), affd. 930 F.2d 1034 (2d Cir. 1991); Green v. Commissioner, 963 F.2d 783 (5th Cir. 1992) (S corporation), affg. Brody v. Commissioner, 9 Kelly v. Commissioner, 877 F.2d 756 (9th Cir. 1989), revg. and remanding T.C. Memo. 1986-405, was one in a line of cases in which taxpayers claimed losses with respect to their passthrough entity. These taxpayers had also extended the assessment period as to their individual returns, but no extensions had been obtained for the passthrough entities, whose assessment period(s) would have expired.Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
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