Kligfeld Holdings, Kligfeld Corporation, Tax Matters Partner - Page 15

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          In Rhone-Poulenc Surfactants & Specialties, L.P. v. Commissioner,           
          114 T.C. 533 (2000), we ruled that section 6229(a) does not                 
          restrict the time in which the Commissioner may challenge a                 
          partnership return, but only ensures that he has at least three             
          years in which to exercise it.18  We also held that the                     
          suspension described in section 6229(d) affects “any open period            
          of limitations applicable to petitioner on the date the FPAA was            
          issued * * *.”  Rhone-Poulenc, 114 T.C. at 554.  The “period of             
          limitations” we referred to is supplied by section 6501, which              
          (with several exceptions) sets a three-year limitations period,             
          measured from the filing or due date of a return, for the                   
          Commissioner to assess taxes or issue a notice of deficiency.               
               Kligfeld’s first argument is based on that section.                    

               18 At least two other courts--the D.C. Circuit and the Court           
          of Federal Claims--have agreed with our interpretation of section           
          6229(a) as creating a minimum, not a maximum, time limit for the            
          Commissioner to adjust partnership items.  Each court noted that            
          construing the section in this way not only honors its plain                
          language, but furthers the Code’s goal of treating all                      
          partnership items alike.  See Andantech L.L.C. v. Commissioner,             
          331 F.3d 972, 977 (D.C. Cir. 2003) (plain language of section               
          6229(a) indicates a minimum period of assessment for partnership            
          items), affg. T.C. Memo. 2002-97; Grapevine Imp. Ltd. v. United             
          States, 71 Fed. Cl. 324, 332-35 (2006) (legislative history                 
          supports the conclusion that section 6229(a) augments the basic             
          statute of limitations, ensuring the IRS has sufficient time to             
          scrutinize certain types of transactions); Rhone-Poulenc, 114               
          T.C. at 544-45 (section 6229(a) provides standard minimum period            
          of time to assess partnership items for all partners; if Congress           
          intended a different meaning, it would have used different                  

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