Law Offices--Richard Ashare, P.C. - Page 17

                                       - 17 -                                         

          after the 1993 taxable year, petitioner would no longer be                  
          allowed to recover those taxes by virtue of a carryback.  Section           
          7605(b) is not violated in a case such as this, where the                   
          Commissioner simply applies the facts, figures, and other data              
          within his lawful possession with an eye towards a legitimate               
          governmental purpose of determining the correct tax liability of            
          a taxpayer under examination.  See Jackson v. Commissioner, T.C.            
          Memo. 1982-556; see also Pleasanton Gravel Co. v. Commissioner,             
          64 T.C. 510, 528 (1975), affd. per curiam 578 F.2d 827 (9th Cir.            
               We also find it meaningful that the revenue agent was                  
          contemporaneously considering issues as to the personal income              
          tax liability of Mr. Ashare, who was petitioner's officer,                  
          director, sole shareholder, and key employee.  That the                     
          Commissioner may glean from the books of an individual third                
          party such as Mr. Ashare information that is relevant to the tax            
          liability of his or her controlled entity does not necessarily              
          mean that the Commissioner performs an improper second                      
          examination of the entity under section 7605(b).  See Geurkink v.           
          United States, supra at 631 ("We emphasize that sec. 7605(b)                
          relates to a second examination of books of account of a taxpayer           
          and does not apply to an examination of books of account of a               
          third person.").  In some settings, the Commissioner's                      
          examination of the books of a corporation's officer, shareholder,           

Page:  Previous  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  Next

Last modified: May 25, 2011