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In Rauenhorst v. Commissioner, supra at 183, we held that the
Commissioner may not take a litigating position contrary to his
own revenue rulings, which constitute public guidance. Neither
the Friendly Hills determination letter nor the instruction
manuals are revenue rulings or are intended by the Commissioner to
constitute public guidance. Therefore, even if they could be
viewed as supporting petitioners' claim that the Commissioner has
minimized the significance of donative intent in some transfers of
medical practice assets, since the cited materials are not revenue
rulings or similar public guidance they do not, under Rauenhurst,
constrain the position that respondent may take in these cases.
II. Issues Involving Individual Petitioners
A. The Kennedys
1. Background
Respondent bases his $3,760 increase in Dr. Kennedy's 1994
Schedule C gross receipts on three documents, all of which are
stipulated exhibits: (1) The examining agent's summary of certain
bank deposits of Dr. Kennedy's, totaling $23,797.26, that is
described as a schedule of Dr. Kennedy's 1994 accounts receivable
after sale of practice (agent's report); (2) a letter from Dr.
Kennedy to his accountant dated February 27, 1994,39 (sic)
(letter), in which he advises his accountant: "I have collected
39Given its contents, the letter was necessarily drafted in
1995.
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