- 10 -
of 25 percent of the amount of gross income stated in the
return”. In computing the amount of gross income omitted, any
amounts “disclosed in the return, or in a statement attached to
the return, in a manner adequate to apprise the Secretary of the
nature and amount of such item” are not taken into account. Sec.
6501(e)(1)(A)(ii). Determining whether adequate notice has been
demonstrated is a question of fact, The Univ. Country Club, Inc.
v. Commissioner, 64 T.C. 460, 468 (1975), and respondent has the
burden of demonstrating that the 6-year period for assessments
set forth in section 6501(e)(1)(A) applies, Seltzer v.
Commissioner, 21 T.C. 398, 401 (1953).
In Colony, Inc. v. Commissioner, 357 U.S. 28, 36 (1958), the
Supreme Court construed the term “omit” in the predecessor of
section 6501(e)(1)(A) as applicable where the return contains “no
clue to the existence of the omitted item.” In determining
whether adequate disclosure has been made under section
6501(e)(1)(A)(ii), we have similarly looked to see whether the
return offered a “clue” as to the existence, nature, and amount
of omitted income. Quick Trust v. Commissioner, 54 T.C. 1336,
1347 (1970), affd. 444 F.2d 90 (8th Cir. 1971). As we stated in
Quick Trust, “this does not mean simply a ‘clue’ which would be
sufficient to intrigue a Sherlock Holmes. But neither does it
mean a detailed revelation of each and every underlying fact”.
Id.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011