Carl Stuart Brandon and Ann Stuart Brandon - Page 7




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          clear error in judging their weight.  Henry v. INS, 74 F.3d 1, 4            
          (1st Cir. 1996).                                                            
          The Amended Return and Tax Year 19932                                       
               Petitioners argue that they believed that as part of their             
          settlement of the deficiencies proposed for 1991 through 1994,              
          the $8,742 overpayment credit claimed on the amended return for             
          1991 would be applied to their outstanding tax liabilities, in              
          particular to tax year 1993.3  As petitioners put it, "The                  
          agreement to the disallowance" was signed by them "only in the              
          context of the overall settlement."                                         
               Petitioners argue that if the "disallowed $8,742" was                  
          intended to be paid, in addition to the agreed upon deficiencies,           
          the total would be more than the original deficiencies proposed             
          by the Examination division.  "No reasonable person would settle            
          an appeal for more than the original amount appealed," they                 
          argue.  The fallacy in this argument is that the deficiency                 


               2RRA 1998 sec. 3001, 112 Stat. 726, added sec. 7491, which             
          shifts the burden of proof to the Secretary in certain                      
          circumstances.  Sec. 7491, however, is applicable to "court                 
          proceedings arising in connection with examinations commencing              
          after the date of the enactment of this Act."  RRA 1998 sec.                
          3001(c), 112 Stat. 727.  The RRA was enacted on July 22, 1998,              
          while the examination of the 1991 through 1994 years in this case           
          was in 1997.                                                                

               3Petitioner Carl Brandon testified that he applied the                 
          $8,742 credit claimed in 1995 on the amended return for 1991                
          toward payment of the tax liability shown on his 1993 joint                 
          return that was filed in 1996.                                              





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