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failing to accept the amended return, the Court of Appeals for
the Fourth Circuit stated:
If an amendment made to correct a mistake,
presented within a reasonable time, is rejected through
a narrow and harsh construction of the law, to the
detriment of the taxpayer, such rejection is arbitrary
and unjust. It certainly is not the duty of the
Commissioner to deprive a taxpayer of any rights justly
due him. [Id. at 391.]
This case, however, does not involve an election made on an
amended return, and, in our view, it was not "presented within a
reasonable time." The issue is whether petitioners in fact
overreported gross receipts on the return originally filed by
them. The gross receipts reported on that return are admissions
that must be overcome by cogent evidence. Estate of Hall v.
Commissioner, 92 T.C. 312, 337-338 (1989); Lare v. Commissioner,
62 T.C. 739, 750 (1974), affd. without published opinion 521 F.2d
1399 (3d Cir. 1975); Kaltreider v. Commissioner, 28 T.C. 121, 126
(1957), affd. 255 F.2d 833 (3d Cir. 1958).
If a portion of the Hecht payments were reported in error in
1989, discovery of the error should have occurred in 1991, when
the 1990 return was prepared, not in 1993 when petitioners' 1989,
1990, and 1991 returns were being examined. The belatedness of
this claim reflects on its validity.
Petitioner testified that Tolbert's Construction had four
jobs during 1989. His testimony is contradicted by other more
contemporaneous and more reliable evidence, including the
admissions on the original return. Tolbert's Construction had at
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