Taxing Opinion Sham Partnership Challenges Irs Tolling
David Morgan is the sole owner of UTA Management, an S Corporation. In 1999, Morgan caused UTA Management’s assets to be contributed to UTAM, a newly formed limited partnership. UTA Management owned a 99 percent partnership interest in UTAM. Morgan later agreed to sell the partnership interests of UTA Management and DDM Management, a separate S corporation that Morgan and his family members owned, to an unrelated insurance company. More than six years after the filing of UTAM’s 1999 partnership return, but less than six years from the filing of Morgan’s 1999 individual return, the IRS mailed a notice of final partnership administrative adjustment to DDM Management (UTAM’s “tax matters” partner) pertaining to UTAM’s 1999 tax year....