8
In The Colony, Inc. v. Commissioner, 357 U.S. 28, 36 (1958)
(an income tax case), the Supreme Court, interpreting the meaning
of this statutory language, said:
We think that in enacting section 275(c) [the
predecessor of section 6501] Congress manifested no broader
purpose than to give the Commissioner an additional 2 [now
3] years to investigate tax returns in cases where, because
of a taxpayer's omission to report some taxable item, the
Commissioner is at a special disadvantage in detecting
errors. In such instances the return on its face provides
no clue to the existence of the omitted item. On the other
hand, when, as here, the understatement of a tax arises from
an error in reporting an item disclosed on the face of the
return, the Commissioner is at no such disadvantage * * *.
This Court has interpreted the Supreme Court's "clue"
standard to mean not "a detailed revelation of each and every
underlying fact", but also that it "does not simply mean a 'clue'
which would be sufficient to intrigue a Sherlock Holmes." Quick
Trust v. Commissioner, 54 T.C. 1336, 1347 (1970), affd. 444 F.2d
90 (8th Cir. 1971). Furthermore, in interpreting this statutory
language (common to both income and estate tax provisions) in
section 6501(e), relating to the omission as "disclosed in the
return, or in a statement attached to the return, in a manner
adequate to apprise the Secretary of the nature and amount of
such item", we have held that disclosure of the omitted material
is adequate, even without disclosing exact dollar amounts. Quick
Trust v. Commissioner, supra; University Country Club, Inc. v.
Commissioner, 64 T.C. 460, 470 (1975); Morris v. Commissioner,
T.C. Memo. 1966-245. The disclosure statement however must be
sufficiently detailed so that a decision whether to select the
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