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establish that petitioner was the sole beneficiary for whom the
proof of claim was filed; what amounts were turned over to the
FTC in satisfaction of this claim; or whether petitioner filed a
proof of claim on her own behalf in the T.G. Morgan, Inc.,
bankruptcy proceeding. Petitioner has not met her burden of
proving she is entitled to deduct a 1992 net operating loss of
T.G. Morgan, Inc., as claimed in 1998.
Petitioner argued that, because she received refunds from
respondent in prior years based on the reported net operating
loss carryovers, the carryover deduction should not now be
treated differently. The Court rejects this argument. Each
taxable year stands alone, and the Commissioner may challenge in
a succeeding year what was condoned or agreed to in a prior year.
Rose v. Commissioner, 55 T.C. 28 (1970). Thus, a taxpayer must
abide by the Internal Revenue Code even if an improper deduction
is claimed and allowed by the Internal Revenue Service in a prior
year. Accordingly, the refunds petitioner received in past years
are inapposite to the decision in this case. Respondent is
sustained on the issue of the net operating loss carryover
deduction.
The Court next addresses petitioner’s alternative claims,
the deductibility of various other losses. At trial, petitioner
claimed the theft loss of a pension plan of $733,500, based on
allegations of fraud, theft, estoppel, and breach of fiduciary
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