## Facts

- Ross Muir was a partner in a limited partnership.
- Muir timely filed federal income tax returns for 1980 and 1981 and reported losses attributable to his partnership interest.
- In 1984 and 1985, the Internal Revenue Service sent Muir Forms 872-A (Special Consent to Extend the Time to Assess Tax) for the 1980 and 1981 tax years, seeking his consent to extend the time for assessment.
- The Forms 872-A did not contain a fixed expiration date and stated that either Muir or the IRS could terminate the consent by executing and sending a Form 872-T (Notice of Termination of Special Consent to Extend the Time to Assess Tax), along with other specified terminating events.
- In 1988, the IRS issued Muir a notice of deficiency disallowing the partnership-loss deductions for 1980 and 1981.
- Muir petitioned the United States Tax Court, contending the notice of deficiency was untimely because the statute of limitations for assessment had expired.
- The Tax Court rejected Muir’s statute-of-limitations argument and sustained the IRS’s determination.
- Muir appealed the Tax Court’s decision to the United States Court of Appeals for the Eighth Circuit.

## Issues

1. Whether Forms 872-A extending the assessment period without a stated expiration date remain effective until terminated in the manner specified on the forms (including by Form 872-T).
2. Whether the IRS’s 1988 notice of deficiency for Muir’s 1980 and 1981 tax years was timely in light of Muir’s executed Forms 872-A.

## Decision

- The Eighth Circuit affirmed the Tax Court.
- The court held that Muir’s Forms 872-A validly extended the limitations period for assessment and remained in effect because the consents had not been terminated under the forms’ termination provisions before the IRS issued the notice of deficiency.
- Because the limitations period remained open, the IRS’s 1988 notice of deficiency was timely.

## Legal Principles

- The IRS and a taxpayer may extend the time for assessment by written agreement. I.R.C. § 6501(c)(4).
- A Form 872-A consent may be open-ended; the duration of the extension is governed by the termination events stated on the form rather than a fixed calendar date.
- When a taxpayer signs Form 872-A and does not terminate it by sending Form 872-T (and no other terminating event occurs), the assessment period remains open and the IRS may issue a notice of deficiency within that extended period.
- A taxpayer who challenges a deficiency notice as time-barred must account for any valid extension agreements that keep the limitations period open.

## Conclusion

The Eighth Circuit affirmed because Muir’s open-ended Forms 872-A extended the assessment limitations period for 1980 and 1981 and were still in force when the IRS issued the 1988 notice of deficiency, making the notice timely.


Muir v. Commissioner, 11 F. App’x 701 (2001)