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and losses therein are properly attributable to her, and that
such transactions are capital in nature. Accordingly, the first
element for the duty of consistency is satisfied.
The second inquiry is whether respondent acquiesced in or
relied on the facts attested by petitioners’ reporting. Caselaw
establishes that the necessary acquiescence exists where a
taxpayer’s return is accepted as filed; examination of the return
is not required. E.g., Estate of Letts v. Commissioner, supra at
300; LeFever v. Commissioner, supra at 543-544; Bentley Court II
Ltd. Pship. v. Commissioner, T.C. Memo. 2006-113. Here,
respondent accepted Ms. Quinn’s 1999 return reporting capital
gain as filed. Mr. Arberg’s 1999 return was examined and changes
were made, but no adjustment to include gains from transactions
in the E Trade account was involved. The resultant deficiency
was agreed to by Mr. Arberg and assessed by the IRS. Hence, the
second element poses no barrier to application of the duty of
consistency.
The third question probes whether the taxpayer is changing a
representation previously made after the time to assess
additional tax for the earlier year has passed. Petitioners, as
reflected in their joint return and revised return for 2000 and
in their arguments herein, seek to alter their 1999 reporting
position to contend that ownership of and/or proceeds of
transactions in the E Trade account are attributable to
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