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Commissioner, 61 T.C. 861, 864 (1974); Waxler v. Commissioner,
T.C. Memo. 1979-425.
Consequently, although the current record might leave us in
doubt as to petitioner’s prospects for ultimately succeeding in
showing error in the notice of deficiency, we shall not deny
petitioner an opportunity to present relevant evidence. As this
Court observed in Parker v. Commissioner, T.C. Memo. 1985-263:
It is true that petitioner is not entitled to a
trial on the possibility that an issue of material fact
might turn up at the trial. First Nat. Bank v. Cities
Service, 391 U.S. 253, 289-290 (1968). But it is
equally true that the fact it may be surmised that
petitioner is unlikely to prevail at trial is not a
sufficient basis for refusing him his day in court with
respect to an issue which is not shown to be sham,
frivolous, or so unsubstantial that it would obviously
be futile to try it. * * *
We reject, however, petitioner’s misguided view, reflected
in his objection to respondent’s motion for summary judgment,
that he is entitled to relief under section 1341. In certain
circumstances, section 1341 may provide tax relief to a taxpayer
who repays money in one year that had been included in gross
income for a prior year under a claim of right. The relief
provided under section 1341, however, applies to the year in
which the repayment is made and does not affect the taxpayer’s
obligation to report as income, in the year of receipt, items
received under a claim of right. See generally MidAmerican
Energy Co. v. Commissioner, 114 T.C. 570, 581 (2000) (explaining
purposes and operation of section 1341), affd. 271 F.3d 740 (8th
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