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Petitioner also argues that respondent should be estopped
from challenging the adequacy of petitioner's records because
respondent failed to raise the issue in a prior audit. This
argument is not well taken. It is well established that the
Commissioner's failure to challenge a taxpayer's treatment of an
item in an earlier year does not preclude an examination of the
correctness of the treatment of that item in a later year.
Automobile Club of Michigan v. Commissioner, 353 U.S. 180, 183
(1957); Alfred I. duPont Testamentary Trust v. Commissioner, 66
T.C. 761, 765 (1976), affd. 574 F.2d 1332 (5th Cir. 1978).
Lastly, petitioner claims respondent failed to employ
certain "standard auditing procedures" that would have enabled
respondent to easily ascertain the correct amount of the
deficiencies. While, as mentioned above, petitioner does not
directly attack respondent's method for determining gross income
and deductions, petitioner contends that respondent was required
to make net worth analyses similar to that prepared by
Mittelstedt. Leaving aside the fact that this supposedly simple
endeavor cost petitioner almost $35,000 in accounting fees,
petitioner has not cited, and we are not aware of, any authority
that requires the Commissioner to employ particular auditing
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