- 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.
1978).
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,
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