- 8 -
known] would attach." See, e.g., Newman v. Commissioner,
T.C. Memo. 1992-652; Lerch v. Commissioner, T.C. Memo. 1987-295,
affd. 877 F.2d 624 (7th Cir. 1989); Hamilton v. Commissioner,
T.C. Memo. 1987-278, affd. without published opinion 872 F.2d
1025 (6th Cir. 1989); Shih-Hsieh v. Commissioner, T.C. Memo.
1986-525, affd. without published opinion 838 F.2d 1203 (2d Cir
1987); Estate of Cardulla v. Commissioner, T.C. Memo. 1986-307;
Apothaker v. Commissioner, T.C. Memo. 1985-445; Boggs v.
Commissioner, T.C. Memo. 1985-429; Meredith v. Commissioner, T.C.
Memo. 1985-170; Stephens v. Commissioner, T.C. Memo. 1984-449;
Phillips v. Commissioner, T.C. Memo. 1984-133; see also Compton
v. Commissioner, T.C. Memo. 1983-642; Hansen v. Commissioner,
T.C. Memo. 1981-98; Nunez v. Commissioner, T.C. Memo. 1969-216;
Brown v. Commissioner, T.C. Memo. 1968-29, affd. per curiam
418 F.2d 574 (9th Cir. 1969). Moreover, as the Court of Appeals
for the Fifth Circuit has stated in a similar setting:
The taxpayer sought to introduce evidence to show the
market value of the option at the time it was given.
This evidence was excluded in the court below. In
addition, the taxpayer attempted to show additional
costs incurred for the timber and not claimed on the
1949 return. Likewise, the court below excluded this
evidence. Also, with respect to the unreported sales,
the taxpayer proffered evidence as to alleged
additional costs incident to the sales not reported on
the 1949 return. Again, the court below excluded the
evidence as being irrelevant. This was error. Indeed,
the appellee, United States, confesses error as to the
exclusion of this evidence and concedes that the case
should be remanded for a new trial. This undoubtedly
is the correct view, for these alleged additional costs
and the reasonable market value of the option, if
proven, are relevant to the existence of a tax
deficiency. Internal Revenue Code of 1939, �293(b).
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