Wheelock v. Commissioner

StekNhageN,

dissenting: A closing agreement under section 606 may involve a composition of numerous detailed controversies between the taxpayer and the Government as to the items determining tax liability for the year. The liability agreed upon may reflect such *620a give and take that no one of these items can be said to have been determined. Neither the original return nor the audit indicates the measure of the liability agreed upon. It is fair to assume that both were adjusted in reaching the final agreement. Without knowing more than that a return had been filed, that the unreduced cost basis of gain shown therein had been at first approved on an audit, and that a settlement had been embodied in a closing agreement under section 606, I could not say that the taxpayer is estopped to claim for the prior year the deduction to which he is otherwise lawfully entitled. Union Metal Mfg. Co., 1 B.T.A. 395.

While the taxpayer should not have both the 1923 deduction and the unreduced cost basis for 1924, and I should deny him the one if he had availed himself of the other, the double advantage ought to be established and not assumed, to support the denial.

Trammell, McMahon, Black, and Leech agree with the above dissent.