- 9 -
must meet in order for it to be a determination that may lead to
an adjustment under sections 1311 and 1314. Section 1314(b)8
describes the method by which this adjustment is to be made.
Thus, in general, the mitigation provisions apply only if
(1) there is an error, (2) there is a determination that meets
certain requirements, (3) at the time of the determination a “law
or rule of law” has the effect of “locking in” the error, and (4)
the detailed statutory “method of adjustment” in section 1314(b)
is complied with.
In the instant cases, the error that respondent complains of
is that petitioners did not report on their 1985 tax returns the
7
(...continued)
(B) Items not included in income.--The
determination requires the exclusion from gross
income of an item not included in a return filed
by the taxpayer and with respect to which the tax
was not paid but which is includible in the gross
income of the taxpayer for another taxable year or
in the gross income of a related taxpayer.
8
Sec. 1314(b) provides, in pertinent part, as follows:
SEC. 1314. AMOUNT AND METHOD OF ADJUSTMENT.
* * * * * * *
(b) Method of Adjustment.--The adjustment authorized in
section 1311(a) shall be made by assessing and collecting,
or refunding or crediting, the amount thereof in the same
manner as if it were a deficiency determined by the
Secretary with respect to the taxpayer as to whom the error
was made or an overpayment claimed by such taxpayer, as the
case may be, for the taxable years or year with respect to
which an amount is ascertained under subsection (a), and as
if on the date of the determination one year remained before
the expiration of the periods of limitation upon assessment
or filing claim for refund for such taxable year or years.
* * *
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011