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sufficient facts to respondent so that respondent knew or ought
to have known of a possible mistake in the reporting of an item.
Petitioner contends that it was unreasonable for respondent
to rely on decedent's 1990 return because the $725,502 pension
distribution was a highly material item. Petitioner contends
that respondent chose not to audit decedent's 1990 return because
of poor judgment. We disagree. The Commissioner may rely on
representations in a return signed under penalties of perjury
absent sufficient facts that provide actual or constructive
knowledge to the contrary. Estate of Letts v. Commissioner,
supra; Hughes & Luce, L.L.P. v. Commissioner, supra. The
reasonableness of the Commissioner's reliance does not change,
per se, because of the mere size of the item reported by the
taxpayer on the return.
We find that respondent did not know or have reason to know
that decedent erroneously claimed rollover treatment for a
portion of the 1990 pension distribution. Petitioner maintains
that the pension distribution and attempted rollover were fully
disclosed on decedent's 1990 return. However, decedent did not
disclose the dates of either the pension distribution or
attempted rollover which would have alerted respondent that the
rollover was untimely. Decedent did not provide any facts to
respondent that would have shown that she failed to timely roll
over a portion of the 1990 pension distribution. We find that
respondent reasonably relied on decedent's 1990 return, did not
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