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availed for tax avoidance purpose and should not be
respected for tax purposes.
Petitioners filed a motion for summary judgment on the
ground that the FPAA was issued after the applicable period of
limitations had expired. Petitioners contend that overstatement
of basis is not an omission from gross income for purposes of the
extended period of limitations under section 6501(e)(1)(A) or, in
the alternative, that the amount omitted was “disclosed in the
return, or in a statement attached to the return, in a manner
adequate to apprise the Secretary of the nature and amount of
such item.” Sec. 6501(e)(1)(A)(ii). Respondent has moved for
partial summary judgment, agreeing that the material facts
necessary to determine whether the overstatement of basis is an
omission from gross income are not in dispute. Respondent
contends, however, that the question of adequate disclosure on
the return involves a dispute as to material facts.
The parties have now stipulated facts as to each partner in
the partnership, to the effect that they are unaware of any
exception to the normal 3-year period of limitations on
assessment other than the issue addressed in this Opinion.
Discussion
Under the general rule set forth in section 6501, the
Internal Revenue Service is required to assess tax (or send a
notice of deficiency) within 3 years after a Federal income tax
return is filed. See sec. 6501(a). For this purpose, the
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