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A. Section 6501
Kligfeld relies on the undisputed fact that he and Estrin
filed their joint return for 1999 on August 15, 2000, which was
after Holdings 2 filed its return. The Commissioner didn’t mail
the FPAA to Holdings 2 until September 22, 2004. Even if the
period of limitations was based on the Kligfelds’ later filing
date, September 22, 2004 is more than three years after August
15, 2000. Therefore, Kligfeld argues, the FPAA is time-barred
and invalid.
The flaw in this argument is plain. The Commissioner is not
arguing that the Kligfelds’ 1999 return included partnership
items challenged in the FPAA sent to Holdings 2--he’s arguing
that it was the Kligfelds’ 2000 return that included the
challenged items. Their 2000 personal return was filed--again,
this is not disputed--in April 2001.
April 2001 is, of course, still more than three years
removed from September 2004; but the general three-year limit
under section 6501 is subject to a number of exceptions. The
Commissioner relies on section 7609, which Congress added to the
Code in response to the problem caused by the reluctance of those
selling alleged tax shelters to give up their customers’ names to
the IRS. Both parties agree that section 7609 applies here
because the IRS issued a “John Doe” summons to Jenkens &
Gilchrist, to get the name of each of its clients who
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