- 21 -
Petitioner points out that both it and the Estate of James
Letts, Jr., represented that the Estate of James Letts, Jr., did
not elect to treat the Item II trust property as QTIP. However,
the fact that both estates made a consistent representation about
the QTIP election does not erase the fact that the estates made
inconsistent representations about whether the Item II trust
property was terminable interest property.
d. Conclusion
We conclude that all three elements for the duty of
consistency are satisfied.
5. Petitioner's Other Contentions
a. Whether Applying the Duty of Consistency
Circumvents the Statute of Limitations
Petitioner contends that applying the duty of consistency
here would improperly circumvent the statute of limitations. We
disagree. It is well established that the duty of consistency
arises only if the time to assess tax on the first tax return has
passed. See R.H. Stearns Co. v. United States, 291 U.S. at 61;
Kielmar v. Commissioner, 884 F.2d at 965; Herrington v.
Commissioner, supra at 757; Hess v. United States, 537 F.2d at
463; Beltzer v. United States, 495 F.2d at 212; Cluck v.
Commissioner, 105 T.C. at 331-332; McMillan v. United States, 14
AFTR 2d 5704, 64-2 USTC par. 9720 (S.D. W. Va. 1964).
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