Charles Levine Preston - Page 5

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          determination that the early ICMA Retirement Trust distribution             
          was income.  Petitioner referred to a number of Internal Revenue            
          Code sections and legal conclusions during his testimony, but his           
          primary contention is that respondent is barred by the statute of           
          limitations on assessment for his 1998 tax year.                            
               Generally, the Commissioner is allowed 3 years after a                 
          return is filed to issue a notice of deficiency.  Sec. 6501.                
          Petitioner contends that because respondent issued the notice of            
          deficiency in 2003, the 3-year period of limitations bars                   
          assessment and collection against him.  The Court disagrees with            
          this argument.  The filing of petitioner’s Federal income tax               
          return is the event that commences the 3-year period of                     
          limitations.  Sec. 6501(a).  Petitioner filed his 1998 Federal              
          income tax return on November 19, 2003.  Respondent issued the              
          notice of deficiency to petitioner for the 1998 tax year on                 
          December 17, 2003.5   That is well within the period of                     


               4(...continued)                                                        
          places the burden on the taxpayer to show that the determinations           
          are incorrect.  Rule 142(a); INDOPCO, Inc. v. Commissioner, 503             
          U.S. 79, 84 (1992); Welch v. Helvering, 290 U.S. 111, 115 (1933).           
          Sec. 7491(a), under certain circumstances, alters the burden of             
          proof with respect to a taxpayer’s liability for taxes in court             
          proceedings arising in connection with examinations commencing              
          after July 22, 1998.  Although this examination commenced after             
          July 22, 1998, the issue does not fall within the scope of sec.             
          7491(a).  Petitioner, therefore, bears the burden of proof.                 
               5The fact that respondent based his notice of deficiency on            
          a substitute for return that was filed on Sept. 5, 2003, is                 
          immaterial.  Had petitioner never filed his 1998 Federal tax                
                                                             (continued...)           




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