Law Offices--Richard Ashare, P.C. - Page 14

                                       - 14 -                                         

          this proceeding that Mr. Ashare's 1993 compensation is                      
               We disagree with petitioner that respondent is precluded by            
          section 7605(b) from asserting that it may not deduct the                   
          compensation it paid Mr. Ashare in 1993.  Section 7605(b)                   
          generally limits the Commissioner to "one inspection of a                   
          taxpayer's books of account * * * for each taxable year".                   
          Congress enacted this section intending "to guarantee that                  
          taxpayers whose accounts had been closed * * * [will] not be                
          subject to 'unnecessary' harassment by being required frequently            
          to present their 'books of account' to the income tax agency".              
          Hinchcliff v. Clarke, 371 F.2d 697, 700 (6th Cir. 1967).                    
          Congress did not intend for section 7605(b) to be a severe                  
          restriction on the Commissioner's powers in monitoring and                  
          enforcing the Code.  See United States v. Powell, 379 U.S. 48,              

               4 Petitioner, taking language from Reineman v. United                  
          States, 301 F.2d 267 (7th Cir. 1962), argues that the Court "must           
          * * * set aside the deficiency assessment set forth in * * * [the           
          revenue agent's second report]" because of a violation of the               
          sec. 7605(b) prohibition against a second examination.  That                
          language is inapplicable to a proceeding originating in this                
          Court.  When a proceeding originates in a District Court, as was            
          the case in Reineman, the Commissioner has already assessed the             
          deficiency that is the subject of the proceeding.  When a                   
          proceeding originates in this Court, the Commissioner usually has           
          not assessed a deficiency.  Absent certain exceptions, none of              
          which are applicable here, the filing of a petition in this Court           
          bars the Commissioner from assessing a deficiency until after the           
          decision entered by this Court becomes final.  See sec. 6213(a).            

Page:  Previous  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  Next

Last modified: May 25, 2011