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(c) Special Rule in Case of Fraud, Etc.--
(1) False return.--If any partner has, with
the intent to evade tax, signed or participated
directly or indirectly in the preparation of a
partnership return which includes a false or
fraudulent item--
(A) in the case of partners so signing
or participating in the preparation of the
return, any tax imposed by subtitle A which
is attributable to any partnership item (or
affected item) for the partnership taxable
year to which the return relates may be
assessed at any time, and
(B) in the case of all other partners,
subsection (a) shall be applied with respect
to such return by substituting “6 years” for
“3 years.”
Respondent issued the FPAAs at issue after the normal 3-year
periods for assessment had expired. With regard to these FPAAs,
however, Hoyt, as TMP, had executed consents extending the
limitations periods. The partnerships argue that the extensions
are invalid because Hoyt executed them while disabled by
conflicts between his own interests and those of his partners.
Respondent argues that the consents were valid and,
alternatively, if the waivers are invalid, the 6-year limitations
period under section 6229(c)(1) applies.
In River City Ranches I, we found that the partnerships did
not present evidence sufficient to show that Hoyt executed the
consents under disabling conflicts of interest. We concluded,
therefore, that the FPAAs were timely issued.
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Last modified: November 10, 2007