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precluded from challenging the tax treatment of an item with
respect to less than all similarly situated taxpayers subject to
such challenge. As stated by the Court of Federal Claims in City
of Galveston v. United States, 33 Fed. Cl. 685, 707-708 (1995),
affd. 82 F.3d 433 (Fed. Cir. 1996):
The mere fact that another taxpayer has been treated
differently from the plaintiff does not establish the
plaintiff’s entitlement. The fact that all taxpayers
or all areas of the tax law cannot be dealt with by the
Internal Revenue Service with equal vigor and that
there thus may be some taxpayers who avoid paying the
tax cannot serve to release all other taxpayers from
the obligation. The Commissioner’s failure to assess
deficiencies against some taxpayers who owe additional
tax does not preclude the Commissioner from assessing
deficiencies against other taxpayers who admittedly owe
additional taxes on the same type of income. A
taxpayer cannot premise its right to an exemption by
showing that others have been treated more generously,
leniently or even erroneously by the IRS. The fact
that there may be some taxpayers who have avoided
paying a tax does not relieve other similarly situated
taxpayers from paying their taxes. [Fn. refs.
omitted.]
Accord Austin v. United States, 611 F.2d 117, 119-120 (5th Cir.
1980); Kehaya v. United States, 174 Ct. Cl. 74, 355 F.2d 639, 641
(1966).
3. U.S. Freightways Corp.
We also conclude that the adoption of the 12-month rule by
the Court of Appeals for the Seventh Circuit in U.S. Freightways
Corp. v. Commissioner, 270 F.3d 1137 (7th Cir. 2001), revg. 113
T.C. 329 (1999), does not require a finding that respondent was
not substantially justified in seeking to capitalize expenses
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