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(1993).10 As previously indicated, the Supreme Court also
interpreted the term “return” in section 6501(a) to be the return
of the taxpayer against whom the deficiency is determined or to
be assessed. Id. at 527.
Although the Bufferd opinion was not in the context of a
shareholder and a C corporation, the following comments appeared
in a footnote to that opinion:
Petitioner additionally asserts that the returns of
shareholders of a Subchapter C corporation cannot be
adjusted after the limitations period has run for
assessing the corporation’s return, and that therefore
S corporation shareholders are entitled to identical
treatment. * * * However, petitioner has not provided a
single authority in support of the premise of this
assertion. At oral argument, the Commissioner
maintained that the opposite is the case, * * * relying
mainly on Commissioner v. Munter , 331 U.S. 210, 67 S.
Ct. 1175, 91 L.Ed. 1441 (1947), which, without
addressing the limitations issue, allowed an adjustment
of shareholders’ 1940 taxes based upon the
Commissioner’s finding that, at the time of its
creation by merger in 1928, the corporation had
acquired the accumulated earnings and profits of its
predecessor corporations. A recent Tax Court decision
also provides indirect support for the Commissioner’s
view: “We have held that the relevant return for
determining whether, at the time a deficiency notice
was issued, the period for assessment had expired under
section 6501(a) ‘is that of petitioner against whom
respondent has determined a deficiency.’ [Citing
Fehlhaber, 94 T.C., at 868.] We have maintained that
position consistently, without regard to the nature of
the source entity. See [cases involving partnerships,
trusts, and S corporations].” Lardas v. Commissioner,
99 T.C. 490, 493 (1992). In any event, it is doubtful
10 The holding in Bufferd v. Commissioner, 506 U.S. 523
(1993), also resolved any question about whether the use of the
term “return” in sec. 6037(a) and/or sec. 6012 results in the
application of the assessment period at the entity level with
respect to S corporations.
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