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valid assessment of a built-in gains tax was made on or before
June 30, 2000. This argument is an offshoot of petitioner’s
argument, which we rejected, that the built-in gains tax is not a
subchapter S item.
Petitioner concedes that the Form 872-S consents extended
the period of limitations for subchapter S items. As the built-
in gains tax is a subchapter S item, it follows that the period
of limitations for this issue was extended to June 30, 2000. See
also secs. 6229(b), 6244; S. Rept. 97-640, at 25 (1982), 1982-2
C.B. 718, 729. Accordingly, as the FSAA was issued on April 24,
2000, the issue is not time barred.
3. Who Is a Party to This Proceeding?
Petitioner further argues that the Court is without
jurisdiction to enter a decision against KRP in this proceeding
because the TEFRA audit and litigation procedures and the FSAA
are directed to the shareholders of the S corporation and not the
corporation itself, and therefore the corporation is not party to
the corporate level proceedings. Respondent argues that an S
corporation is a party to the corporate level proceedings.
The correct tax treatment of subchapter S items is
determined in a unified proceeding at the corporate level rather
than in separate actions against each shareholder. Secs. 6241
and 6242; N.Y. Football Giants, Inc. v. Commissioner, supra at
155; Univ. Heights at Hamilton Corp. v. Commissioner, 97 T.C.
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