- 11 - petitioner’s tax for the 1994 tax year. Petitioner has failed to show the invalidity of the notice. 2. Claim of Arbitrariness Petitioner claims that the notice is arbitrary and erroneous, and amounts to nothing more than a naked assessment, without foundation. We assume that petitioner wishes to invoke the rule of Helvering v. Taylor, 293 U.S. 507 (1935). The rule of Helvering v. Taylor, may be simply put: A court is given sufficient cause to set aside respondent’s determination of a deficiency if it is shown to the court that such determination was arbitrarily made. See id. We need engage in no extended discussion of that rule. The record adequately demonstrates that respondent’s determination of a deficiency was based on the similarity of the 1994 tax return to petitioner’s returns for the preceding 2 years (for which respondent found cause for adjustments) and petitioner’s failure to comply with the document request and consent to an extension of time to assess tax. Simply put, respondent did not act arbitrarily, but with cause.1 1 On brief, petitioner argues that respondent acted arbitrarily in not agreeing to a restricted Form 872, requiring petitioner to consent to waive the time to assess tax only with respect to tax attributable to items similar to those giving rise to adjustments for the preceding 2 years. Respondent’s explanation is that it is against policy to agree to restricted consents until an examination is completed. While we do not find that policy arbitrary (quite to the contrary), we fail to see how here, at least, respondent’s refusal to agree to a restricted consent makes respondent’s determination of a deficiency (continued...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011