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by the President” and so are not exempt from taxation under
section 912(2).
Pavich did argue that the Commissioner conceded the case by
sending him a notice of abatement for the full amount at issue.
However, this just reflects a misunderstanding of the technical
rules of assessment. Pavich brought these cases in 2004; the
Commissioner mistakenly didn’t take note of this, and went ahead
and assessed the tax as if the cases didn’t exist. Because this
violated the law that usually gives taxpayers a chance to sue in
Tax Court first, the Commissioner quite properly reversed (or
“abated”) those assessments. As we said in The Connell Business
Co. v. Commissioner, T.C. Memo. 2004-131, “While the abatements
might be construed to constitute an admission that the prior
assessments were premature, they in no way constitute admissions
as to the proper amount of the deficiencies.”
The only other issues left for resolution are the various
additions to tax that the Commissioner determined in his notice
of deficiency. The parties actually stipulated to the underlying
facts justifying those additions--Pavich did not file returns for
the four years at issue until the eve of trial, satisfying the
predicate for imposition of the failure-to-timely-file addition
to tax under section 6651(a); the Commissioner did file
substitutes for returns under section 6020(b) for three of those
years, justifying the failure-to-pay addition to tax for those
years under section 6651(a)(2); and Pavich failed to have
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Last modified: May 25, 2011