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v. Commissioner, 1 B.T.A. 342 (1925), a case involving
income and profits taxes for the years 1918 to 1920.
In that case, the Board of Tax Appeals found that the
Commissioner's revenue agent had not properly computed the
taxpayer's net income. The Board noted that the revenue
agent had arrived at the taxpayer's net income "by adding
certain alleged omissions of income to the net income
returned by the taxpayer on his original return, without a
verification of the entire net income, either by an
examination of all the income and expenses, or by a proof
of the opening and closing balance sheets." Id. at 346.
At the same time, the Board found that the taxpayer's
proof, consisting principally of an "audit" of the
taxpayer's books by an independent certified public
accountant, could not prove the correctness of the
taxpayer's net income. Nevertheless, the Board found "from
the entire record that the proposed deficiency [was] not
well founded" and "disallowed" the deficiency. Id.
Petitioners' argument focuses on alleged "gross
errors of fact contained in the original revenue examiner's
report", and petitioners ask the Court "to disallow the
Commissioner's contention that a deficiency existed in the
first place". In particular, petitioners assert that "the
revenue examiner was unable to cite any statute which would
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