- 23 -
of deficiency. As we have previously indicated, we do not
believe that section 66(b) was implicit or even considered in
making the adjustments contained in the notice of deficiency. It
is a closer call to say whether reliance on section 66(b) is
"inconsistent" with the language in the notice of deficiency. In
the final analysis, we think that section 7522 makes the question
of whether reliance on section 66(b) is, or is not,
"inconsistent" with the notice of deficiency irrelevant, if the
basis on which respondent relies was not described in the notice
of deficiency and requires different evidence.
Section 7522, which was enacted after the Abatti decision,
requires that a notice of deficiency "describe the basis" for the
tax deficiency.20 Section 7522 makes no exception for a basis
20Sec. 7522 does not articulate specific standards for
determining whether the description of the Commissioner's basis
is adequate, nor does it provide any statutory remedy or
sanction. The only reference in sec. 7522(a) to a failure to
abide by its provisions provides: "An inadequate description
under the preceding sentence shall not invalidate such notice."
We view this provision as referring only to the "validity" of the
notice of deficiency for jurisdictional purposes. As the Court
of Appeals for the Ninth Circuit has stated:
The Tax Court has jurisdiction only when the
Commissioner issues a valid deficiency notice, and the
taxpayer files a timely petition for redetermination.
"A valid petition is the basis of the Tax Court's
jurisdiction. To be valid, a petition must be filed
from a valid statutory notice." Stamm International
Corp. v. Commissioner, 84 T.C. 248, 252 (1985). See
Midland Mortgage Co. v. Commissioner, 73 T.C. 902, 907
(continued...)
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