Eric B. Benson, et al. - Page 8

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          disclosures must adequately apprise the Commissioner of the                 
          nature and amount of the relevant item.  Sec. 6501(e)(1)(A)(ii).            
          The question of whether the taxpayer adequately disclosed an item           
          on the return is a factual question.  Whitesell v. Commissioner,            
          90 T.C. 702, 707-708 (1988).                                                
               The purpose of extending the period of limitations under               
          section 6501(e) is to level the playing field when the taxpayer’s           
          omission of income places the Commissioner at a disadvantage in             
          discovering errors.  Colony, Inc. v. Commissioner, 357 U.S. 28,             
          36 (1958).  Interpreting a prior version of section 6501(e), the            
          Supreme Court stated that Congress extended the period of                   
          limitations to allow the Commissioner additional time “to                   
          investigate tax returns in cases where, because of a taxpayer’s             
          omission to report some taxable item, the Commissioner is at a              
          special disadvantage in detecting errors.  In such instances the            
          return on its face provides no clue to the existence of the                 
          omitted item.”  Id.  To adequately apprise the Commissioner, “The           
          statement must be sufficiently detailed to alert the Commissioner           
          and his agents as to the nature of the transaction so that the              
          decision as to whether to select the return for audit may be a              
          reasonably informed one.”  Estate of Fry v. Commissioner, 88 T.C.           
          1020, 1023 (1987).  While a taxpayer’s disclosure must be more              
          substantial than supplying the Commissioner with “a ‘clue’ which            
          would be sufficient to intrigue a Sherlock Holmes”, the                     

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