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In Chertkof v. Commissioner, 66 T.C. 496 (1976), affd. 649
F.2d 264 (4th Cir. 1981), the Commissioner asserted a deficiency
based on shifting income from a later year to an earlier year.
The Commissioner issued a refund on his own initiative for the
later year. The taxpayer paid the deficiency, sued in District
Court, and won a refund for the earlier year. The Commissioner
then sought relief under the mitigation provisions to assert a
deficiency with respect to the later year. This Court rejected
the taxpayers' argument that there was no error as to the later
year because the refund had been forced upon them.
In Priest Trust v. Commissioner, 6 T.C. 221 (1946), the
taxpayer trust was prepared to pay tax on a distribution on
behalf of a beneficiary, but the Commissioner gave it a
deduction. This Court later determined that the beneficiary
should not be taxed. In a later action by the Commissioner under
the mitigation provisions to re-open the year the trust received
the deduction, this Court rejected the trust's argument that it
"privately" maintained a consistent position because it did not
originally claim the deduction:
It does not seem important to us who proposed the
allowance of the deduction, or upon what theory. The
important fact is that it was allowed, that a tax was
paid pursuant to the allowance of the deduction, and
that the action was erroneous. * * * [Id. at 226.]
In the same way, in spite of the fact that petitioner agreed
in principle that he was not entitled to the 1987 CLD, he
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