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was a “financing arrangement” and consequently Andantech’s income
should be increased by $34,482,268 for rent payable in 1994.
On September 21, 1998, NEFI and Norwest timely filed a
petition for Andantech’s 1994 taxable year (docket No. 15532-98).
OPINION
I. Procedural Issues
At the outset, we deal with two procedural matters. First, we
determine whether for purposes of this litigation the statute of
limitations period under section 6501(a) expired with respect to
the 12/10/93 short period and/or the 12/31/93 short period.
Second, we determine whether the FPAAs for the 12/10/93 short
period and/or the 12/31/93 short period are valid.
First, we turn to the period of limitations matter.
Petitioners acknowledge that the period for assessing a deficiency
in tax under section 6501(a) remains open for RD Leasing and EICI.
They assert, however, that section 6501(a) is inapplicable to
partnership items and affected items. They maintain that the
period for assessing a deficiency related to partnership items and
affected items is controlled by section 6229(a), and that the
periods within which respondent could issue an FPAA with respect to
Andantech’s 12/10/93 short period and its 12/31/93 short period had
expired under section 6229(a) before the mailing of those FPAAs.
Petitioners’ position is contrary to our holding in Rhone-
Poulenc Surfactants & Specialties, L.P. v. Commissioner, 114 T.C.
533 (2000), interlocutory appeal dismissed (for lack of appellate
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