- 5 -
relied on that representation or report for that year, and (3)
the taxpayer attempts to change that representation or report in
a subsequent year, after the period of limitations has expired
with respect to the year of the representation or report, and the
change is detrimental to the Commissioner. LeFever v.
Commissioner, supra at 543; see also Herrington v. Commissioner,
supra at 758; Shook v. United States, 713 F.2d 662, 667 (11th
Cir. 1983); Beltzer v. United States, 495 F.2d 211, 212 (8th Cir.
1974); Cluck v. Commissioner, 105 T.C. 324, 332 (1995). When
these requirements are met, the Commissioner may treat the
previous representation by the taxpayer as true, although, in
fact, it is not. Herrington v. Commissioner, supra. The duty of
consistency is an affirmative defense raised by respondent, and
respondent has the burden of showing that it applies. Rule
142(a).
Before we consider whether or not the three elements of the
duty of consistency are present in this case, we address
petitioner's argument that the duty of consistency is not a
viable equitable doctrine. Petitioner relies on two alternative
positions for this argument. First, petitioner argues that the
Court of Appeals for the Ninth Circuit does not recognize the
duty of consistency in tax deficiency proceedings. In the
alternative, petitioner argues that the recent Supreme Court
decision in United States v. Brockamp, 519 U.S. ___, 117 S. Ct.
849 (1997), questions the continued viability of the duty of
consistency as equitable relief in the Tax Court.
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