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substantial reductions in claimed deductions. The parties to
those cases stipulated that the partnerships entered into
transactions that lacked economic substance and created
substantial distortions of partnership income.
II. Respondent’s Correspondence With Petitioner
In a letter dated December 16, 1996, respondent notified
petitioner of a discrepancy between the amount of loss reported
on petitioner’s Schedule K-1, Partner’s Share of Income, Credits,
Deductions, etc., for Agri-Venture Fund, an AMCOR partnership in
which petitioner had invested during 1985, and the amount
petitioner reported on his return for 1985. Petitioner responded
by a letter dated December 31, 1996, in which he advised
respondent that “[to] the best of my knowledge, the statute of
limitation has expired as to all personal, partnership or other
items reported on my 1985 tax return”.
Respondent replied to petitioner in a letter dated January
20, 1997. As noted supra, respondent had previously issued FPAAs
to the TMPs of all of the AMCOR partnerships in which petitioner
participated, and they had already petitioned this Court for
review of the adjustments made therein. In relevant part, the
letter dated January 20, 1997, read as follows:
Agri-Venture Fund is in Appeals at the present time.
Since the examination is not completed, the statute
remains open per Internal Revenue Code 6221. The tax
treatment of any partnership item shall be determined
at the partnership level. Therefore, the statute on
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