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individual breeding sheep that did not exist. He knew that the
total purchase price each sheep partnership agreed to pay for its
sheep was far greater the fair market value of similar quality
sheep. He knew that the flock recap sheets identifying the
partnership sheep contained false information and that the
partnership records were maintained in an unreliable manner. He
knew that the deductions claimed on the partnership returns for
depreciation and other farm expenses relating to the alleged
sheep purchases were false and fraudulent. He knew that the
deductions claimed on the partnership returns for interest on the
partnership promissory notes were false and fraudulent. He knew
that the guaranteed payment deductions claimed on the partnership
returns were false and fraudulent. He knew that he was selling
the partners false and fraudulent deductions. And he knew all
these facts when he prepared and signed each of the partnership
returns.
Accordingly, we hold that the 6-year statute of limitations
on assessment was open under section 6229(c)(1)(B) for the 1987,
1988, and 1989 partnership returns at the time the FPAAs were
issued. The FPAAs were issued within the 6-year period for
assessing the tax. Therefore, it follows and we so hold that the
FPAAs were timely issued for the 1987, 1988, and 1989 returns.
With respect to Hoyt, a partner and the TMP, who signed and
participated in the preparation of the partnership returns
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