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would be necessary in calculating a deficiency that is based on
the tax reported in the Form 1040X. Such could be the case where
the Form 1040X in fact duplicated amounts reported in the
original Form 1040. Petitioners, in contrast, seem to argue that
a like reduction is more uniformly necessary. Such could be the
case only if the deficiency were to be computed based on the tax
reported in the original Form 1040, without giving credit for
additional tax paid with the Form 1040X. In fact, some of the
language used by petitioners could signal a misunderstanding of
the basis for the 1996 and 1997 deficiencies, although a cursory
review of the notices and relevant returns shows that the
baseline numbers in the notices were taken from the Forms 1040X,
not the Forms 1040.
So long as the amended returns are used as the starting
point, there would generally be no need to eliminate the
additional income reported therein from the deficiency
calculation. Here, although the manner in which the $1,700,000
was duplicated between the original and amended 1997 returns is
not clear from the record, respondent was entitled to determine
and concede on audit that it had been. Petitioners have not so
much as alluded to, much less demonstrated, any analogous
duplication between the original and amended 1996 returns.
Accordingly, the Court has no grounds for mandating a concession
by respondent of income voluntarily reported by petitioners on
their own Form 1040X for 1996.
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