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disclosed, within the meaning of section 6501(e)(1)(A)(ii), by
virtue of having been reported in the returns of the petitioner
trusts.8 Thus, petitioners contend, they did not omit from gross
income an amount in excess of 25 percent of gross income reported
on their individual returns, precluding respondent’s use of the
6-year period of limitations provided in section 6501(e)(1)(A).
For the reasons explained below, we conclude that
petitioners failed adequately to disclose the gross income
omitted from their 1995 and 1996 returns, and that respondent has
carried his burden of showing that he is entitled to the 6-year
period of limitations set forth in section 6501(e)(1)(A).
Accordingly, the notice of deficiency issued to petitioners is
timely as to the 1995 and 1996 tax years.
Section 6501(a) provides that “the amount of any tax imposed
by this title shall be assessed within 3 years after the return
was filed”. Section 6501(e)(1)(A) extends the 3-year period of
limitations to 6 years where the taxpayer “omits from gross
income an amount properly includible therein which is in excess
8 Although petitioners at various points claim that the
income they concede should have been reported on their 1995 and
1996 returns was in fact reported on the returns of the
petitioner trusts, the parties’ stipulations do not establish
this fact. Nonetheless, in light of our conclusion, infra, that
any reporting of the income in the returns of the petitioner
trusts may not be considered for purposes of sec.
6501(e)(1)(A)(ii) in these cases, it is immaterial whether all,
or only some, of petitioners’ omitted income was reported in the
returns of the petitioner trusts.
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