- 7 - States, supra. Moreover, we apply equitable principles in cases within our jurisdiction. See Woods v. Commissioner, 92 T.C. 776 (1989). Petitioner also contends that the Court of Appeals for the Ninth Circuit criticized the duty of consistency in Unvert v. Commissioner, 656 F.2d 483, 486 n.2 (9th Cir. 1981), affg. 72 T.C. 807 (1979), as requiring case-by-case adjudication. In Unvert, the taxpayers recovered an amount that they had previously deducted. The deduction was improper when claimed. The Court of Appeals rejected the erroneous deduction exception to the tax benefit rule and required the taxpayer to report the amount recovered as income to offset the prior improper deduction. In that case, the Tax Court had relied on the duty of consistency to hold the taxpayer to the prior, incorrect representation and required the taxpayer to report the income. Unvert does not stand for a rejection of the duty of consistency by the Ninth Circuit as petitioner argues. Rather, Unvert declined to recognize an exception to the tax benefit rule, evidencing a liberal approach by the Ninth Circuit to equitable principles in tax deficiency proceedings. In Wentworth v. Commissioner, 244 F.2d 874 (9th Cir. 1957), affg. 25 T.C. 1210 (1956), the Court of Appeals for the Ninth Circuit applied certain equitable principles similar in operation and effect to the duty of consistency doctrine in a tax deficiency case. The taxpayer had received a corporate distribution in a prior year and did not report the distributionPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
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