Peter M. and Susan L. Hoffman - Page 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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