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affected by the election than the taxpayer would
have had if the election had been timely made
* * *.[16]
The interests of the Government are prejudiced if granting
petitioner an extension of time to file the section 475(f)
election would result in petitioner’s having a lower tax
liability than if petitioner had timely filed a section 475(f)
election. The parties have stipulated that between April 17,
2000, the date petitioner should have filed his section 475(f)
election, and July 21, 2000, the date petitioner actually filed
his section 475(f) election, petitioner did not conduct any
trading activities and incurred no further gains or losses.
Accordingly, pursuant to section 301.9100-3(c)(1)(i), Proced. &
Admin. Regs., there is no prejudice in the instant case because
granting petitioner an extension of time to file his section
475(f) election does not result in petitioner’s having a lower
tax liability than he would have had if he had timely filed the
election.
Respondent contends, however, that prejudice is presumed
because of the special rules for accounting method regulatory
16The interests of the Government are also prejudiced if the
taxable year in which the regulatory election should have been
made, or any taxable years that would have been affected by the
election had it been timely made, are closed by the period of
limitations on assessment under sec. 6501 before the taxpayer is
granted 9100 relief. Sec. 301.9100-3(c)(1)(ii), Proced. & Admin.
Regs. That provision is not a prohibition in the instant case,
as the limitations periods for all taxable years affected by the
election remain open.
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