Bakersfield Energy Partners, LP, Robert Shore, Steven Fisher Gregory Miles and Scott McMillan, Partners Other Than Tax Matters Partner - Page 2



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               Steven Ray Mather and Elliott Hugh Kajan, for petitioners.             
               Lloyd T. Silverzweig, for respondent.                                  


                                       OPINION                                        

               COHEN, Judge:  In a Notice of Final Partnership                        
          Administrative Adjustment (FPAA) sent October 4, 2005, respondent           
          determined that Bakersfield Energy Partners, LP (BEP), had                  
          overstated its basis in certain gas reserves sold during the                
          taxable year 1998, thus causing an understatement of partnership            
          income by more than 25 percent of the amount stated in the                  
          return.  The issue for decision is whether, under those                     
          circumstances, the overstatement of basis constitutes an omission           
          of income giving rise to an extended 6-year period of                       
          limitations.  This issue has been presented by petitioners’                 
          motion for summary judgment and respondent’s motion for partial             
          summary judgment.  Unless otherwise indicated, all section                  
          references are to the Internal Revenue Code in effect for the               
          year in issue.                                                              
                                     Background                                       
               For purposes of the pending motions, the following facts               
          have been assumed.  The petitioning partners are all partners in            
          BEP.  BEP’s principal place of business was in California at the            
          time the petition was filed.  Prior to April 1, 1998, BEP owned             
          an interest in an oil and gas property with Harcor, an unrelated            







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