1. During Year 1, Tom received, in addition to his annual salary of $100,000, a piece of land as additional compensation.

Part A. Assume that Tom properly reported the car as gross income on his return, filed April 15, Year 2. His return reflected value of the land as $10,000. The IRS selected Tom’s return for audit. On February 1, Year 5, which is not a leap year, the IRS mailed to him a notice of deficiency in which the IRS took the position that the value of the land was $30,000. Tom has not responded to the notice of deficiency.

Questions:

(i) When is the last day that the IRS can assess additional tax with respect to Tom’s Year 1 return?
(ii) When is the last day for the IRS to assess additional tax with respect to Tom’s Year 1 return if Tom filed his return on March 1, Year 2, instead of April 15?
(iii) When is the last day for the IRS to assess additional tax with respect to Tom’s Year 1 return if Tom had filed his return on July 20, Year 2 instead? Does it matter whether Tom obtained an extension of time to file?

Part B. Assume that Tom did not report the land on his return Year 1, which he filed April 15, Year 2. On February 1, Year 5, which is not a leap year, the IRS mailed him a notice of deficiency reflecting its determination that Tom has $30,000 of additional gross income attributable to the land.

Questions:

(i) Assume Tom was unaware that the land constitutes gross income to him, and that’s why he didn’t report it on his return.

- If he does not respond to the notice of deficiency, what the last day the IRS may assess the additional tax with respect to Tom’s Year 1 return?
- If he does respond on March 10, Year 5 by signing form 870 and waiving restrictions on assessment of tax, when is the last day the IRS may assess additional tax with respect to Tom’s Year 1 return?

(ii) If Tom had intentionally failed to