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partnerships’ gross receipts. Respondent has not shown whether
Desert Investments or the other partnerships filed 1990 Federal
income tax returns and, if so, the amount of gross receipts
reported therein. We conclude that respondent has failed to meet
his burden of production with respect to establishing the amount
of gross income stated on petitioners’ 1990 Federal income tax
return. Respondent has failed to show that the 6-year period of
limitations is applicable. Therefore, the general 3-year period
of limitations is applicable. Sec. 6501(a).
Petitioners’ return was filed on September 10, 1991, and the
3-year period of limitations ended on September 10, 1994. Any
amounts assessed, paid, or collected after that date are barred
by expiration of the period of limitations. Sec. 6401(a). Thus,
petitioners’ liability for the tax on the cancellation of
indebtedness income was eliminated when the period of limitations
expired before either formal assessment by respondent or payment
by petitioners. Ill. Masonic Home v. Commissioner, 93 T.C. 145
(1989); Diamond Gardner Corp. v. Commissioner, 38 T.C. 875
(1962). Petitioners have no liability for interest or a penalty
relating to a tax liability that was eliminated by the expiration
of the period of limitations. Accordingly, respondent’s proposal
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