1 Rule references are to the Tax Court Rules of Practice and

Procedure. Section references are to the Internal Revenue Code,

in effect for the period under consideration.

T.C. Memo. 2001-251

UNITED STATES TAX COURT

MICHAEL SKLAR AND MARLA SKLAR, Petitioners v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 395-01. Filed September 21, 2001. 

Michael Sklar and Marla Sklar, pro sese.

Steven M. Roth, for respondent.

MEMORANDUM OPINION

GERBER, Judge: Petitioners, under Rule 121,1 moved for

summary judgment on the question of whether the period for

assessment had expired at the time respondent conceded an
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adjustment concerning self-employment tax. Petitioners do not

object to the concession of self-employment tax adjustment, but

to the corresponding elimination of the deduction for one-half

the conceded self-employment tax adjustment. Respondent objects

to petitioners’ motion, solely on the ground that the period for

assessment was suspended under section 6503(a) at the time of the

determination. There is no dispute about any material fact, and

this matter is ripe for summary judgment. 

Background

Petitioners’ joint 1995 Federal income tax return was filed

October 15, 1996. On April 18, 1999, and again on October 14,

1999, petitioners executed Forms 872, Consent to Extend the Time

to Assess Tax, agreeing to extend the assessment period to April

30, 2000, and October 31, 2000, respectively. 

Respondent issued a Notice of Deficiency to petitioners on

October 6, 2000, determining a $2,075 deficiency in income tax

and an $8,123 deficiency in self-employment tax for petitioners’

1995 taxable year. The self-employment tax deficiency was based

on respondent’s determination that petitioners received $83,514

of self-employment income, rather than $6,694 of self-employment

income as reported on petitioners’ 1995 return. Because of the

increase in self-employment tax liability, respondent

correspondingly determined that petitioners were entitled to a

deduction equal to one-half of the self-employment tax or $4,062. 
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Respondent also determined penalties and/or additions to the tax. 

On January 8, 2001, petitioners’ petition was timely filed with

this Court. 

Respondent’s answer was filed on March 1, 2001. In his

answer, respondent admitted error with respect to the

determination of additional self-employment tax, as follows:

Adjustment of Self-Employment Income to $83,514.00 in

Lieu of $6,694.00: Admits respondent erred in

determining petitioners received self-employment income

in the amount of $83,514 in lieu of $6,694 reported on

their return. Given this admission of error,

respondent alleges as a matter of computation,

petitioners’ self-employment tax should not be

increased, nor should they be allowed an increased

self-employment tax deduction, as determined in the

notice of deficiency. [Emphasis supplied.]

Petitioners contend that respondent should not be allowed to

take away the $4,062 deduction allowed in connection with the

determination of additional self-employment tax liability because

the period for assessment and, hence, the period within which

respondent may make changes or adjustments expired prior to the

time respondent conceded the self-employment income adjustment.

Discussion

Petitioners’ argument is based on their interpretation of

the language of the consents executed by the parties in

connection with the extension of the assessment period. In

particular, petitioners reference the portion of the consent form

which provides that in the event respondent issues a Notice of

Deficiency within the consent period, the period is further
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2 We find it curious that petitioners’ argument that the

period for assessment and, therefore, adjustments to income

expired seems to apply only to adjustments that adversely affect

petitioners’ tax liability. Apparently, petitioners’ position

only applies where it negatively affects their tax status.

extended by 60 days. Petitioners point out that the second

consent extended the assessment period until October 31, 2000. 

Petitioners believe that the 60-day language is a tack-on period

that resulted in the period for assessment ending December 31,

2000, which was a Sunday followed by a holiday, so the period for

assessment ended January 2, 2001. Following that line of

reasoning, petitioners note that respondent’s answer was filed

after January 2, 2001, the date petitioners believe the

assessment period ended. Based upon the above, petitioners argue

that no further determinations are permissible.

Petitioners have misinterpreted the language on the consent

form. The specific language is as follows:

(1) The amount(s) of any Federal Income tax due on

any return(s) made by or for the above taxpayer(s) for

the period(s) ended 1995 may be assessed at any time on

or before October 31, 2000. However, if a notice of

deficiency in tax for any such period(s) is sent to the

taxpayer(s) on or before that date, then the time for

assessing the tax will be further extended by the

number of days the assessment was previously

prohibited, plus 60 days.

That language provides for the extension of the assessment period

to a date certain, unless respondent issues a notice of

deficiency. Then, an additional number of days is added,

including the 60-day period relied on by petitioners.2
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Once a notice of deficiency is timely issued within the

period for assessment, including any valid extensions, then the

period for assessment provided for in section 6501 is “suspended

for the period during which the Secretary is prohibited from

making the assessment * * * (and in any event, if a proceeding in

respect of the deficiency is placed on the docket of the Tax

Court, until the decision of the Tax Court becomes final), and

for 60 days thereafter.” Sec. 6503(a). In that regard, section

6213(a) provides that, upon the issuance of a deficiency notice,

the Commissioner is precluded from assessing a deficiency

throughout the 90- or 150-day period in which a taxpayer may file

a petition with the Tax Court. See Powerstein v. Commissioner,

99 T.C. 466, 471 (1992).

In this case, the notice of deficiency and petition were

timely, and accordingly, the assessment period was suspended and

did not expire, as petitioners contend. 

To reflect the foregoing,

An order will be issued

denying petitioners’ Motion for

Summary Judgment.