- 14 - tax benefit rule, respondent has not raised a new matter for which respondent bears the burden of proof. Colonnade Condominium, Inc. v. Commissioner, 91 T.C. 793, 795 n.3 (1988). We accordingly reject petitioners’ attempt to limit our consideration of the applicability of the tax benefit rule in the instant case. We do not find merit in petitioner’s reliance on Schuster’s Express, Inc. v. Commissioner, supra. In Schuster’s Express the taxpayer maintained insurance expense accounts on the basis of a predetermined percentage of gross receipts and deducted the amount so computed even though its actual insurance expense was less than the estimated amount. The difference between the estimated and actual expense was credited to a reserve account. The Commissioner disallowed the deductions claimed for the amounts credited to the reserve account in the taxpayer’s open years and sought, pursuant to section 481(a), to include in the taxpayer’s income for the earliest open year the balance of the reserve account as of the end of the preceding year, which comprised additions made in closed years.6 The Court found that the applicability of section 481(a) constituted a new matter for which the Commissioner bore the burden of proof, stating: [the Commissioner], the party on whom the burden of proof rests, has not established that under * * * [the 6 Sec. 481(a) permits the making of an adjustment with respect to amounts that were omitted in closed years. Graff Chevrolet Co. v. Campbell, 343 F.2d 568, 571-572 (5th Cir. 1965).Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
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