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fraud, duress, etc.” Id. at 775 (the Danielson Rule). In
reaching its conclusion, the court cited several factors,
including “whipsaw” problems the Government would encounter if
taxpayers could unilaterally disavow the form of their
transactions for Federal tax purposes. The U.S. Court of Appeals
for the Sixth Circuit, the circuit to which this case is
appealable, has generally adopted the Danielson Rule. See
Schatten v. United States, 746 F.2d 319 (6th Cir. 1984).
Not all circuits have adopted the Danielson Rule in cases
where taxpayers from the outset have taken tax reporting
positions consistent with their view of the substance of the
transaction. But it is generally accepted that taxpayers may not
execute a transaction in one form, file returns consistent with
that form, and then argue for an alternative tax treatment after
their returns are audited. See, e.g., Little v. Commissioner,
T.C. Memo. 1993-281 (concluding that taxpayers “are entitled to
attack the form of their transaction only when their tax
reporting and other actions have shown an honest and consistent
respect for what they argue is the substance of the
transaction.”).
In Estate of Durkin v. Commissioner, 99 T.C. 561 (1992),
supplementing T.C. Memo. 1992-325, we considered and rejected an
attempt by a taxpayer to disavow the form of, and previous tax
reporting relating to, a transaction. The taxpayer in that case
engaged in two simultaneous transactions with an unrelated
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