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 thePage: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011