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investigate tax returns in cases where, because of a
taxpayer’s omission to report some taxable item, the
Commissioner is at a special disadvantage in detecting
errors. In such instances the return on its face
provides no clue to the existence of the omitted item.
On the other hand, when, as here, the understatement of
a tax arises from an error in reporting an item
disclosed on the face of the return the Commissioner is
at no such disadvantage. * * * [Id. at 36; emphasis
added.]
This Court has held that, in setting out the “clue”
standard, the Supreme Court did not mean a clue sufficient to
intrigue the likes of Sherlock Holmes, or a clue that involved a
detailed revelation of each and every underlying fact. See Quick
Trust v. Commissioner, 54 T.C. 1336, 1347 (1970), affd. 444 F.2d
90 (8th Cir. 1971). Disclosure of omitted material can be
adequate without disclosing exact dollar amounts. See University
Country Club, Inc. v. Commissioner, 64 T.C. 460, 470 (1975). The
proper application of the rule is whether the need for an
adjustment is “reasonably” apparent from the face of the Federal
income tax return. See id. at 471.
The 1990 Federal income tax return of Western informed
respondent that a sale of partnership interests had occurred and
that petitioner had used an amount realized equal to $27,965,551
in reporting gain. Petitioner claims that statements in the
returns for the partnerships that were conveyed clearly disclose
that Western, at the time of sale, was liable for $69,959,490 of
combined debt. Petitioner argues that, because payment or
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