- 14 -
Commissioner, T.C. Memo. 1993-429. Simply stated, the rule set
forth in Scar v. Commissioner, supra, applies in the narrow set
of circumstances where the notice of deficiency on its face
reveals that respondent failed to make a determination.
The following excerpt from Kantor v. Commissioner, supra,
reflects the Court of Appeals for the Ninth Circuit's view of the
applicability of Scar.
Before issuing a notice of deficiency pursuant to
26 U.S.C. [sec.] 6212(a), the Commissioner must make an
actual determination of the taxpayer's liability.
Scar, 814 F.2d at 1370. As a general rule, however, we
will not "look behind a deficiency notice to question
the Commissioner's motives and procedures leading to a
determination." Id. at 1368.
We recognized an exception to this rule in Scar,
where the notice of deficiency revealed on its face
that a determination had not been made using the
taxpayer's return. Id. * * *
We later emphasized in Clapp v. Commissioner,
however, that the kind of review exercised in Scar is
applicable "[o]nly where the notice of deficiency
reveals on its face that the Commissioner failed to
make a determination." 875 F.2d at 1402 (emphasis
added). In Clapp, we determined that the notices of
deficiency were adequate to establish jurisdiction
where they indicated various adjustments to income and
the fact that these adjustments were based upon the
disallowance of deductions. The taxpayers in Clapp
attempted to show that the Commissioner had not made an
actual determination of their deficiency by introducing
internal IRS documents which suggested that at the time
the notices were issued, the IRS had not decided which
legal theory it would rely upon to secure a deficiency
judgment. We nevertheless refused to question the
Commissioner's determination because there was no
indication on the face of the notices that a
determination had not been made. Id. at 1400-01. The
disallowed deductions did not refer to unrelated
entities, nor had the tax rate been arbitrarily set.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011