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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...)
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