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a matter of law. Petitioner argues that the S corporation
election was invalid and that JPS was therefore not an S
corporation during the years in issue in this case. Respondent's
cross-motion presents the issue of whether the doctrine of duty
of consistency prevents petitioner from denying that JPS was an S
corporation during the years in issue. We address respondent's
cross-motion first, because if respondent is correct that the
duty of consistency applies, then we must hold for respondent
even if petitioner's argument about the invalidity of the S
corporation election is correct in substance. Thus, we turn to
an examination of the duty of consistency.
Respondent's Cross-Motion
The Tax Court and the Court of Appeals for the Fifth Circuit
(to which an appeal in this case would lie) have adopted the
triune standard for the application of the duty of consistency.
Herrington v. Commissioner, 854 F.2d 755, 758 (5th Cir. 1988),
affg. Glass v. Commissioner, 87 T.C. 1087 (1986); Estate of Letts
v. Commissioner, 109 T.C. ___ (1997); Cluck v. Commissioner, 105
T.C. 324, 332 (1995). The following elements must be present for
the duty of consistency to apply:
(1) a representation or report by the taxpayer; (2) on
which the Commissioner has relied; and (3) an attempt
by the taxpayer after the statute of limitations has
run to change the previous representation or to
recharacterize the situation in such a way as to harm
the Commissioner. * * *
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