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the Les. Accordingly, we sustain respondent’s determination that
the Les, as transferees, are liable for DDL’s unpaid 1990 and
1991 income tax liabilities (inclusive of penalties).14
E. Period of Limitations
Respondent generally must assess tax against individual
taxpayers such as the Les within 3 years of the later of the due
date or filing date of their return. Sec. 6501(a) and (b)(1);
Mecom v. Commissioner, 101 T.C. 374, 382 (1993), affd. without
published opinion 40 F.3d 385 (5th Cir. 1994). One exception to
this general rule is that in the case of a “false or fraudulent
return” with the intent to evade tax, the tax may be assessed at
any time. Sec. 6501(c)(1). Respondent bears the burden of
proving fraud in this context. Sec. 7454(a); Rule 142(b). In
that we have already concluded above that respondent has met his
burden of proof as to fraud in each year, we conclude that
assessment of petitioners’ 1990 and 1991 tax liabilities is not
barred by the statute of limitations.15
14 Because we find that petitioners had the actual intent to
defraud the Government, we do not need to address whether there
was constructive fraud under Cal. Civ. Code sec. 3439.04(b) (West
1997).
15 Respondent alternatively argued that the period of
limitations has not run because the Les’ omission of income was
“substantial” under sec. 6501(e)(1)(A). We need not and do not
consider this argument. We also need not and do not consider
respondent’s other alternative argument that the period of
limitations for 1991 remains open given the timely extension for
that year. See sec. 6501(c)(4).
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