-7-
It is determined that you have no basis for refund of
$218,152, nor is there basis for relief from the
statutory interest being sought by the government. You
have offered no other alternative means of disposing of
your liability, accordingly standard collection means
will be pursued.
In making this determination, the Appeals officer did not review
the 1990 tax returns for the six partnerships in which
petitioners were partners.
In this proceeding, petitioners’ sole allegation is that the
Appeals officer erroneously determined that the assessment of the
penalty and interest was proper. Petitioners allege that the
assessments were made after the expiration of the period of
limitations provided in section 6501. We agree that the
assessment was untimely.
Any amounts assessed, paid, or collected after the
expiration of the period of limitations are overpayments.
Sec. 6401(a); Estate of Michael v. United States, 173 F.3d 503
(4th Cir. 1999); Alexander v. United States, 44 F.3d 328
(5th Cir. 1995); Ewing v. United States, 914 F.2d 499 (4th Cir.
1990); Philadelphia & Reading Corp. v. United States, 944 F.2d
1063 (3d Cir. 1991). Accordingly, if the period of limitations
expired before either formal assessment by respondent or payment
by petitioners, then petitioners are not liable for any tax on
the cancellation of indebtedness income. Ill. Masonic Home v.
Commissioner, 93 T.C. 145 (1989); Diamond Gardner Corp. v.
Commissioner, 38 T.C. 875, 881 (1962) (“any payment by a taxpayer
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