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CCH (cch.taxgroup.com) reports:

A Final Partnership Administrative Adjustment issued by the IRS more than three years after the partnership filed its return, which included gain on the sale of a ranch and reflected an overstatement of its basis in the ranch, was not time-barred. The extended six-year statute of limitations under Code Sec. 6501(e)(1)(A) applied because the government established that the partnership's overstatement of its basis on disposition of the ranch was not an error but was an omission of income. The omitted income was in excess of 25 percent of the amount of gross income stated on the return and was not disclosed in a manner adequate to apprise the government of the nature and amount of the income. Further, the partnership did not qualify for the exception to the definition of gross income provided in the gross receipts provision because its sale of the ranch did not qualify for treatment as the sale of goods or services by a trade or business.
Although the partnership's tax return reflected the basis in the ranch and the net gain on the sale, information regarding the contribution to the partnership of the obligation to cover and close the partners' short sale of Treasury notes and the effect on the basis of the partnership's interest in the ranch was not adequately disclosed. Moreover, the individual partners' returns did not indicate that the partnership had any involvement in the short sale of the Treasury notes. The partners' inadequate reporting placed the IRS at a disadvantage in detecting errors because it was unable to determine the manner by which the partnership arrived at its basis figure.
Salman Ranch Ltd., FedCl, 2007-2 USTC ¶50,803
Other References:
Code Sec. 6501
CCH Reference - 2007FED ¶38,971.13
CCH Reference - 2007FED ¶38,971.40
Tax Research Consultant
CCH Reference - TRC IRS: 30,152