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zero. The duty of consistency elements are accordingly satisfied
as applied against Bentley Court.
Alternatively, Bentley Court argues that the duty of
consistency doctrine does not apply because Bentley Court’s
mistake was one of law and not fact. In support of this argument,
Bentley Court contends that opinions of Courts of Appeals
regarding the duty of consistency doctrine have limited that
doctrine to cases involving a mistake of fact.
The appellate courts, however, focus upon whether there was
a benefit received based on a taxpayer’s representation or
misrepresentation. See, e.g., LeFever v. Commissioner, 100 F.3d
778, 787 (10th Cir. 1996), affg. 103 T.C. 525 (1994); Banks v.
Commissioner, 345 F.3d 373, 388 (6th Cir. 2003), affg. in part,
revg. in part T.C. Memo. 2001-48, revd. on other issues 543 U.S.
426 (2005). Bentley Court argues that Lewis made a mistake of law
by his misunderstanding of which type of students could qualify as
low-income individuals under the statutory language, and that this
does not involve a factual issue regarding whether the individuals
were students. See, e.g., Estate of Posner v. Commissioner, T.C.
Memo. 2004-112. This case would normally be appealable to the
Court of Appeals for the Fourth Circuit, where the following
approach of the Court of Appeals for the Fifth Circuit has been
adopted:
“To raise this duty of consistency in tax accounting we
do not think a willful misrepresentation need be proven,
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