Peter M. and Susan L. Hoffman - Page 2

               amended return.  R rejected those arguments in a notice                
               of determination issued to Ps sustaining the proposed                  
               levy.  R determined that the applicable period of                      
               limitations is the 6-year period under sec.                            
               6501(e)(1)(A), I.R.C., and that the assessment was                     
               timely because the amended return was filed 2 days                     
               before the expiration of the 6-year period.  R argues                  
               that the 6-year period applies because, R asserts, the                 
               reference to “gross income stated in the return” in                    
               sec. 6501(e)(1)(A), I.R.C., does not include any of the                
               income of the partnerships given that Ps neither                       
               actively nor materially participated in the trade or                   
               business of any of those partnerships.                                 
                    Held:  The 6-year period of limitations in sec.                   
               6501(e)(1)(A), I.R.C., is inapplicable, and the                        
               assessment made on Nov. 6, 1997, was untimely.  Ps’                    
               “gross income stated in the return” is determined by                   
               reference to the information returns of the                            

               Steven Toscher, Stuart A. Simon, and Bruce I. Hochman, for             
               Daniel M. Whitley and Irene S. Carroll, for respondent.                


               LARO, Judge:  Petitioners petitioned the Court under section           
          6330(d), and the parties submitted the case to the Court fully              
          stipulated.  See Rule 122.  We decide herein whether respondent             
          assessed certain amounts against petitioners within the period              
          allowed by section 6501.  We hold respondent did not.  Unless               
          otherwise indicated, section references are to applicable                   
          versions of the Internal Revenue Code.  Rule references are to              

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