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the tax treatment of the item (or
items).
(2) Disclosure of legal issue. In lieu of
setting forth the facts affecting the tax treat-
ment of an item (or group of similar items) in
accordance with paragraph (b)(1)(iv) of this
section, the taxpayer may set forth a concise
description of the legal issue presented by such
facts.
(3) Requirement of particularity.
Disclosure is not adequate with respect to an
item (or group of similar items) if it consists
of undifferentiated information that is not
arranged in a manner that reasonably may be
expected to apprise the Internal Revenue Service
of the identity of the item, its amount, and the
nature of the potential controversy concerning
the item (or items). For example, attachment to
the return of an acquisition agreement generally
will not constitute adequate disclosure of the
issues involved in determining the basis of
certain acquired assets.
(c) Disclosure on return. The Commissioner
may by revenue procedure prescribe the circum-
stances in which information provided on the
return in accordance with the applicable forms
and instructions will be adequate disclosure
for purposes of section 6661.
We agree with respondent that petitioner has not
established that the understatement for any of the
years in issue should be reduced pursuant to section
6662(d)(2)(B)(ii) with respect to the portion of the
understatement attributable to the personal holding company
tax. A review of each of petitioner's returns for 1989
through 1993 might cause the reviewer to wonder about the
application of personal holding company tax, but it would
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