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20-percent shareholder.3 Petitioners argue that the deficiency
procedures do not apply to this item. Respondent argues to the
contrary, asserting that a partner-level determination was
required as to this item. We agree with respondent.
2. Whether respondent’s determination of the
accuracy-related penalties is subject to the deficiency
procedures. The parties agree that it is not. So do we.4
Background
Petitioners are husband and wife, and they resided in
Bloomfield Hills, Michigan, when their petition was filed with
the Court. They filed a joint 1999 Form 1040, U.S. Individual
Income Tax Return, on or before August 18, 2000.
Petitioner was a 20-percent shareholder of CTA Acoustics
(CTA) when CTA was sold on April 30, 1999, at a gain to the
shareholders of approximately $30 million. Petitioner’s portion
3 DII’s other shareholders were the two other partners in
DIP. Each of those other shareholders owned a 40-percent
interest in DIP and a 40-percent interest in DII.
4 Petitioners’ motion states in part that the Court lacks
jurisdiction over both issues because the applicable periods of
limitation for assessment of the deficiency and penalties have
expired. Because the expiration of the period of limitation is
an affirmative defense and does not affect this Court’s
jurisdiction, see Davenport Recycling Associates v. Commissioner,
220 F.3d 1255, 1259 (11th Cir. 2000), affg. T.C. Memo. 1998-347;
Columbia Bldg., Ltd. v. Commissioner, 98 T.C. 607, 611 (1992);
cf. Day v. McDonough, 547 U.S. 198, , 126 S. Ct. 1675, 1681
(2006) (“A statute of limitations defense * * * is not
‘jurisdictional’”), we reject without further discussion the
portion of petitioners’ arguments dealing with the period of
limitation.
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