UTAM, Ltd., et al. v. Commissioner, IRS

This appeal stemmed from a short sale transaction that raised UTA Management's outside basis in the UTAM partnership. On October 13, 2006, more than six years after the filing of UTAM's 1999 partnership return, but less than six years from the filing of the individual partner's 1999 individual return, the IRS mailed a notice of final partnershp administrative adjustment to DDM Management, UTAM's "tax matters" partner, pertaining to UTAM's 1999 tax year. At issue was whether the mailing of a notice of final partnership administrative adjustment by the IRS tolled an individual partner's limitation period under I.R.C. 6501. The court held that the six-year limitations period applied with regard to the individual partner's 1999 return and that the assessment period, suspended pursuant to I.R.C. 6229(d), was the partner's open assessment period under section 6501. Accordingly, the judgment of the Tax Court on the statute of limitations issue was reversed and the case was remanded for further proceedings.