Cleo Perfume, Inc. - Page 14

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               Respondent contends that the duty of consistency is applicable         
          herein.  Petitioner disagrees.                                              
               We conclude that the duty of consistency is not applicable             
          under the facts herein.  There was no erroneous deduction in a              
          prior year which respondent acquiesced in or relied on to                   
          respondent's detriment.  As stated above, petitioner's misreporting         
          of the treatment of the consigned goods resulted in a wash when             
          calculating the cost of goods sold deduction such that petitioner           
          did not receive any benefit and respondent did not suffer any               
          detriment.  Respondent has not suggested any other reason why the           
          inflated inventory balances would cause respondent to fail to               
          collect the correct amount of tax.  Consequently, we hold that the          
          duty of consistency is inapplicable.                                        
               In sum, we hold that petitioner did not have additional income         
          of $2,031,778 in its tax year ended June 30, 1991.                          
          Issue 2.  Section 6651(a)(1) Addition to Tax                                
               We next determine whether petitioner is liable for an addition         
          to tax for failure to timely file its 1991 return.  Section                 
          6651(a)(1) imposes an addition to tax of 5 percent of the amount of         
          tax due per month for each month that a tax return is not timely            
          filed, not to exceed 25 percent. An exception is made for                   
          reasonable cause not due to willful neglect.                                
               One of the requirements of the automatic extension of time to          
          file a tax return is the proper estimation of the final tax                 

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