Walter T. McGee - Page 11

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               2.   Case Law Upon Which Petitioner Relies                             
               Petitioner contends that the facts here are similar to those           
          in Scar v. Commissioner, 814 F.2d 1363 (9th Cir. 1987), revg. 81            
          T.C. 855 (1983).  We disagree.  In Scar, the Commissioner                   
          disallowed a deduction from a partnership with which the                    
          taxpayers had no connection.  Statements attached to the notice             
          of deficiency showed that the Commissioner had issued it without            
          reviewing the tax return that the taxpayers had filed.  Id. at              
          1365.  The U.S. Court of Appeals for the Ninth Circuit held that            
          the notice of deficiency was invalid under section 6212(a)                  
          because the Commissioner had not reviewed the taxpayers' return             
          or otherwise actually determined the taxpayers' liability for a             
          particular taxable year.  Id. at 1370.  The notice of deficiency            
          in the instant case shows that respondent examined petitioner's             
          tax return for 1987 and adjusted items on that return.  There is            
          no statement in the notice of deficiency which suggests that                
          respondent did not actually determine a deficiency in                       
          petitioner's income tax for 1987.                                           
               Petitioner contends that, as in Portillo v. Commissioner,              
          932 F.2d 1128 (5th Cir. 1991), affg. in part and revg. in part              
          and remanding T.C. Memo. 1990-68, respondent incorrectly                    
          determined that petitioner received unreported income.  In                  









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