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conclude that petitioner has placed the deficiency for the year
1989 in dispute by raising the statute of limitations.
Section 6501(a) generally provides that “the amount of any
tax imposed by this title shall be assessed within 3 years after
the return was filed”. The only apparent exception that might
apply here is that contained in section 6501(c).13 Section
6501(c)(1) provides an exception to the general 3-year period of
limitations: “In the case of a false or fraudulent return with
the intent to evade tax, the tax may be assessed, or a proceeding
in court for collection of such tax may be begun without
assessment, at any time.” Respondent bears the burden of proving
by clear and convincing evidence that petitioner filed a false or
fraudulent tax return. Sec. 7454(a); Rule 142(b). Respondent
makes no argument that he has proven fraud or that any other
exception applies with respect to petitioner’s 1989 liability.
Respondent failed to offer evidence relating to petitioner’s 1989
tax liability. The canceled checks, invoices, receipts, and
testimony from the criminal proceeding that were admitted into
evidence primarily relate to petitioner’s 1990, 1991, and 1992
tax years. Since respondent failed to offer evidence of fraud
13 Sec. 6501(e) extends the period of limitations to 6 years
when the taxpayer omits amounts properly includable in gross
income and the omitted amounts exceed 25 percent of the reported
gross income. Sec. 6501(e) does not apply here because
respondent issued the notice of deficiency on Aug. 20, 1999,
which is more than 6 years after petitioner timely filed his 1989
income tax return.
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