Shaw v. Commissioner

DEAN HOWARD SHAW, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Shaw v. Commissioner
Docket No. 6688-73.
United States Tax Court
T.C. Memo 1975-365; 1975 Tax Ct. Memo LEXIS 6; 34 T.C.M. (CCH) 1577; T.C.M. (RIA) 750365;
December 24, 1975, Filed
Dean Howard Shaw, pro se.
George W. McDonald, for the respondent.

GOFFE

MEMORANDUM FINDINGS OF FACT AND OPINION

GOFFE, Judge: The Commissioner determined a deficiency in petitioner's Federal income tax for the taxable year 1968 in the amount of $2,222. The sole issue involved is whether the net operating loss of $12,975.45 sustained by petitioner for the taxable year 1971 must be reduced for personal exemptions and nonbusiness deductions in allowing it as a deduction in the taxable year 1968.

FINDINGS OF FACT

Petitioner filed his Federal income tax return for the taxable year 1968 with the "Internal Revenue District at Ogden, Utah." He was a resident of Fullerton, California when he filed his petition.

Petitioner claimed a net operating loss of $12,985.45 for the taxable year*7 1971. The return for 1971 contained a mathematical error $10of; therefore, the loss sustained in that year was $12,975.45. On his Federal income tax return for that year he claimed personal exemptions totaling $1,350 and claimed nonbusiness deductions totaling $6,414.31. During 1971 he received nonbusiness income of $284.36. The return for 1971 was audited by the Internal Revenue Service and the sole adjustment made was to correct the $10 mathematical error.

Petitioner sought the advice of the Internal Revenue Service in preparing Form 1045, which is prescribed for use by taxpayers other than corporations in claiming a tentative carryback adjustment under section 6411 of the Internal Revenue Code of 1954. Petitioner found the instructions for preparation of Form 1045 confusing. He discovered that the employee of the Internal Revenue Service was also confused but petitioner prepared the Form 1045 as best he could.

The Commissioner, in his statutory notice of deficiency, reduced the amount claimed as the net operating loss carryback deduction for personal exemptions and nonbusiness deductions, offset by nonbusiness income.

OPINION

Petitioner does not contest*8 the correctness of the adjustment made by the Commissioner. He concedes that it is authorized by law. He contends, however, that it is unfair because he relied upon the advice of the Internal Revenue Service in preparing the Form 1045 to claim the tentative refund.

We believe the testimony of petitioner. We believe that he acted in good faith and we find it commendable for him to seek the assistance of the Internal Revenue Service in preparing Form 1045. At a time when taxpayers are encouraged by the Commissioner to seek the assistance of the Internal Revenue Service in the preparation of their returns it may appear to petitioner, and we can appreciate his viewpoint, unfair that erroneous advice by the Internal Revenue Service is not binding on the Commissioner of Internal Revenue. The law is, however, well-settled. Darling v. Commissioner,49 F.2d 111">49 F.2d 111, 113 (4th Cir. 1931), affg. 19 B.T.A. 337">19 B.T.A. 337 (1930), cert. denied 283 U.S. 866">283 U.S. 866 (1931); Alfred Fortugno,41 T.C. 316">41 T.C. 316, 323-324 (1963), affd. 353 F.2d 429">353 F.2d 429 (3d Cir. 1965). 1 From the standpoint of fair play, therefore, we must regrettably hold for respondent. *9

Decision will be entered

for the respondent.


Footnotes

  • 1. James M. Ferguson,T.C. Memo 1974-244">T.C. Memo 1974-244.