- 38 -
one of the tax years is closed with regard to assessment. Herrington
v. Commissioner, 854 F.2d 755, 757 (5th Cir. 1988), affg. 87 T.C.
1087 (1986). With regard to petitioner's 1988 tax year, respondent
seeks to apply the doctrine where only one taxable year is involved,
where respondent audited the 1988 income tax return of 2618 Inc and
where respondent issued a no-change report. In this case, we decline
to apply the duty of consistency to petitioner with regard to this
adjustment.
The absence of Helmle's consent makes the attempted S election
by 2618 Inc invalid for 1988, and petitioner is not required to
report the additional $91,668 in flow-through income from 2618 Inc
that represented nondeductible repayments on a loan.
Petitioner’s attempt, however, on brief, to raise a new issue
and to remove from his taxable income the $32,326 in flow-through
income from 2618 Inc that petitioner did report on his 1988 Federal
income tax return is rejected. Petitioner’s claim in this regard
constitutes a claim for refund with regard to an item not properly
raised by petitioner as a new issue under our Rules. Rule 41.
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