Gregory Stewart Malone and Pamela Joyce Malone - Page 9

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            cannot be heard to argue that they have been somehow deprived of                            
            their due process rights by this procedure.  The issue was                                  
            decided by the Supreme Court at least 67 years ago.  See Phillips                           
            v. Commissioner, 283 U.S. 589, 599 (1931).                                                  
                  Petitioners rely on Scar v. Commissioner, 814 F.2d 1363 (9th                          
            Cir. 1987), revg. 81 T.C. 855 (1983), and assert that there has                             
            been no "determination" of a deficiency in their case and                                   
            therefore the notices of deficiency are invalid.  In Scar, the                              
            court noted that "The Commissioner acknowledges in the notice                               
            that the deficiency is not based on a determination of deficiency                           
            of tax reported on the taxpayer's return and that it refers to a                            
            tax shelter the Commissioner concedes has no connection to the                              
            taxpayers or their return."  Scar v. Commissioner, supra at 1368.                           
            The facts of this case differ from those in Scar.                                           
                  Petitioners evidently think that they fall within the rule                            
            of Scar because they admittedly filed no Federal income tax                                 
            returns.  But section 6211(a) makes it clear that only "if a                                
            return was made by the taxpayer" does the tax shown "on a return"                           
            figure in the Commissioner's determination of a deficiency.  If                             
            no return is made, the amount shown as the "'tax by the taxpayer                            
            upon his return' shall be considered as zero."  Sec. 301.6211-                              
            1(a); see Laing v. United States, supra.                                                    








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