- 10 -
(interpreting similar language in section 275(c), the predecessor
to section 6501(e)). The period of limitations starts to run
with the filing of the original return, and the filing of an
amended return does not affect the period of limitations.
Insulglass Corp. v. Commissioner, 84 T.C. at 207; Goldring v.
Commissioner, supra at 82.
I. Disclosures Under Section 6501(e)(1)(A)(ii)
ERG was a subchapter C corporation that was a taxable
entity. NPI was a subchapter S corporation and as such was a
passthrough entity that was not taxable. Burton Benson
controlled the operations of both of these entities.
The Bensons first argue that the determinations sustained in
our prior opinion were not omissions of gross income but
reallocations of reported corporate income and expenses to Burton
Benson as the controlling shareholder of ERG. In particular, the
Bensons argue that NPI’s Forms 1120S, U.S. Income Tax Return for
an S Corporation, including amended Forms 1120S, disclosed
royalties, engineering services,6 and rents7 that NPI received
6 In our prior opinion, we found that transfers made by ERG
to NPI of $483,098 in 1989, $3.6 million in 1993, and $160,063 in
1994 constituted constructive dividends to the Bensons. Benson
v. Commissioner, T.C. Memo. 2004-272.
7 In our prior opinion, we held that the Bensons received
constructive dividend income of $40,067 in 1990, $46,560 in 1993,
and $63,444 in 1994 from excess rent paid by ERG for its use of
the Stanford plant. Id. We also held that the Bensons received
constructive dividend income of $29,400 in 1989, $29,400 in 1990,
(continued...)
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