-10- evidence does not persuade us that respondent’s action was beyond the permissible limits of Rev. Proc. 94-68 regardless of whether he based his decision to reopen petitioner’s 1998 case upon Rev. Proc. 94-68, sec. 5.01(2) or (3). Petitioner asserts that respondent is precluded from performing a second inspection of petitioner’s records under section 7605(b). Section 7605(b) provides: SEC. 7605(b). Restrictions on Examination of Taxpayer.-- No taxpayer shall be subjected to unnecessary examination or investigations, and only one inspection of a taxpayer’s books of account shall be made for each taxable year unless the taxpayer requests otherwise or unless the Secretary, after investigation, notifies the taxpayer in writing that an additional inspection is necessary. The purpose of section 7605(b) is not to limit the number of examinations, but to shift the discretion for a reexamination of the taxpayer’s books to higher management personnel from the field agent; this serves “to emphasize the responsibility of agents to exercise prudent judgment in wielding the extensive powers granted to them by the Internal Revenue Code.” United States v. Powell, 379 U.S. 48, 56 (1964); Miller v. Commissioner, supra. Section 7605(b) was not meant to restrict the scope of respondent’s legitimate power to protect the revenue. Section 7605(b) is not to be read so broadly as to defeat the powers granted to respondent to examine the correctness of a taxpayer’s return. See De Masters v. Arend, 313 F.2d 79, 87 (9th Cir.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011