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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
language).
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Last modified: November 10, 2007