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there was a disposition of the section 38 property, they incurred
no recapture liability under section 47(a) and section 1.47-6,
Income Tax Regs. We disagree.
Assessment of additional tax liability shown on an amended
return does not estop the Commissioner from refusing to recognize
the amended return upon subsequent audit. Courts have repeatedly
upheld the Commissioner’s authority to determine a taxpayer’s
liability without regard to an amended return that was previously
accepted. Burnet v. Porter, 283 U.S. 230 (1931); Bird v. United
States, 241 F.2d 516 (1st Cir. 1957); Polt v. Commissioner,
233 F.2d 893 (2d Cir. 1956), affg. Estate of Dula v.
Commissioner, 23 T.C. 646 (1955); Melahn v. Commissioner, 9 T.C.
769 (1947) (Court reviewed).4 As these cases illustrate,
assessment of additional taxes shown on an amended return is
routine IRS procedure.5 To ascribe to this essentially
(...continued)
offset $118,179 of tax liability. Thus they have in fact used
more of the credit than they acknowledge. The logic of their
position would also require the filing of an amended return for
1984 deleting the credit carried back to that year, a point they
belatedly admitted by conceding the deficiency for 1984.
4 Contra Daniels Jewelers v. United States, 150 Ct. Cl. 525,
279 F.2d 226 (1960), in which the court was evidently troubled by
the Commissioner’s inconsistency in retracting earlier acceptance
of the taxpayer’s untimely election only for those years in which
the taxpayer’s tax liability would have been decreased by the
election.
5 The assessments in this case may have been too hasty. In
respondent’s brief she explained that the additional tax
liability shown on petitioners’ amended returns for 1985 and 1986
was automatically assessed pursuant to sec. 6201(a)(1). This
provision authorizes assessment of taxes shown on the return.
But this authority is subject to the restriction on assessment of
a deficiency attributable to a partnership item during a period
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