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partnership proceeding becomes final, respondent may assess a tax
liability for a year open under the period of limitations, even
though the underlying partnership item adjustments are
attributable to transactions that were completed in a year for
which assessments of the partners’ tax is barred because of the
expiration of the period of limitations.
In this case, although the periods prescribed by sections
6229(a) and 6501(a) have run for 2000 and 2001, the FPAA
determined adjustments to partnership items (capital losses) that
may have income tax consequences to the partners at the partner
level in 2002-04, years open under the period of limitations. If
the adjustments to partnership items in the FPAA are sustained,
respondent may assess a computational adjustment or determine a
deficiency against the partners for those open years. However,
respondent concedes that, because the tax years 2000 and 2001 are
closed, respondent is barred from assessing any deficiencies,
penalties or additions to tax with respect to the partners’ 2000
and 2001 tax years.
This Court finds that respondent’s issuance of the FPAA on
April 12, 2006, for G-5’s 2000 tax year was not barred by any
period of limitations13 and that the period of limitations for
assessing taxes attributable to partnership items for
13 See Kligfeld Holdings v. Commissioner, 128 T.C. ___
(2007).
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Last modified: November 10, 2007