OPINION
Halpern, Judge:
Respondent, by means of several notices of deficiency, determined deficiencies in income tax, additions to tax, and increased interest, as follows:
John A. and Shirley R. Lardas — Docket No. 29363-89
Additions to tax and increased interest
Year Deficiency Sec. 6663 (a)(1) Sec. 6661 Sec. 6621(c)
1983 $69,295 1$3,464.75 $17,324 2
1985 49.043 1.lS 11.603 2
Angelo A. and Janet M. Lardas• — Docket No. 30368-89
Additions to tax and increased interest
Year Deficiency Sec. 6653(a)(1) Sec. 6661 Sec. 6621(c) Sec. 6651(a)(1)
1983 $14,857 1$743 $3,714 2
1984 19,642 1982 4,911 2
1985 47,766 12,388 11,9422
1986 23,048 317,319 2$4,385
Unless otherwise noted, all section references are to the Internal Revenue Code in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure.
The sole question
The parties have submitted this case fully stipulated and there is no material dispute about the facts. All petitioners had their legal residence at Newport Beach, California, at the time of the filing of the petitions herein.
At the time the notices of deficiency were mailed to each set of petitioners, the period for assessment had not expired with respect to their individual income tax returns, because petitioners had consented to an extension of such period. At that time, more than 3 years had passed since the filing of information returns on behalf of the trusts in question. The details of those ultimate findings are set forth in the appendix, which is attached to this opinion and incorporated herein. During the taxable years here under consideration, the trusts in question were so-called grantor trusts (grantor trusts).2
Discussion
I. Introduction
Section 6501(a), in pertinent part, provides that generally “the amount of any tax imposed by this title shall be assessed within 3 years after the return was filed”. (Emphasis added.) The parties disagree as to which return is referenced by section 6501(a), where the taxpayer challenges a deficiency attributable solely to his investment by way of a grantor trust for which an information return must be filed pursuant to section 1.671-4(a), Income Tax Regs.3 More generally, the question is whether the return referenced by section 6501(a) is that of the taxpayer or that of some “source entity” from which the taxpayer’s disputed tax items derive. If the taxpayer’s return is that referenced by section 6501(a), as respondent argues, then respondent will prevail, because the period for assessment had not, at the time the notices of deficiency were issued, expired as to petitioners’ individual tax returns. If, however, the return referenced by section 6501(a) is that of the source entity — in this case the source entities are two grantor trusts — then petitioners argue that they should prevail, because the period for assessing those trusts had expired at the time the notices of deficiency were issued.4
II. The Tax Court Position
We have held that the relevant return for determining whether, at the time a deficiency notice was issued, the period for assessment had expired under section 6501(a) “is that of petitioner against whom respondent has determined a deficiency”. Fehlhaber v. Commissioner, 94 T.C. 863, 868 (1990) (Court reviewed), affd. 954 F.2d 653 (11th Cir. 1992). We have maintained that position consistently, without regard to the nature of the source entity involved. See id., Bufferd v. Commissioner, T.C. Memo. 1991-170, affd. 952 F.2d 675 (2d Cir. 1992), cert. granted 505 U.S. _, 112 S. Ct. 2990 (1992), and Kelley v. Commissioner, T.C. Memo. 1986-405, revd. and remanded 877 F.2d 756 (9th Cir. 1989) (subchapter S corporations); Siben v. Commissioner, T.C. Memo. 1990-435, affd. 930 F.2d 1034 (2d Cir. 1991) (partnerships); Stahl v. Commissioner, T.C. Memo. 1990-320 and 96 T.C. 798 (1991), and Fendell v. Commissioner, 92 T.C. 708 (1989), revd. 906 F.2d 362 (8th Cir. 1990) (complex trust); Bartol v. Commissioner, T.C. Memo. 1992-141 (grantor trust).
Recently, we reaffirmed our view that “ ‘the relevant return for purposes of determining the statute of limitations is the return of the taxpayer against whom the tax is sought.’” Bartol v. Commissioner, supra (quoting Bufferd v. Commissioner, 952 F.2d 675, 678 (2d Cir. 1992), affg. T.C. Memo. 1991-170, cert. granted 505 U.S. _, 112 S. Ct. 2990 (1992)). After consideration, we continue to hold that view.5
III. Does the Golsen Doctrine Require a Different Result?
Petitioners argue that, under the doctrine of Golsen v. Commissioner, 54 T.C. 742, 756-757 (1970), affd. 445 F.2d 985 (10th Cir. 1971), the Ninth Circuit’s holding in Kelley v. Commissioner, 877 F.2d 756 (9th Cir. 1989), revg. and remanding T.C. Memo. 1986-405, is controlling. Before reviewing the Ninth Circuit’s holding in Kelley v. Commissioner, supra, we will briefly outline the history and theory underlying the Golsen doctrine.
A. Background: The Lawrence Doctrine
Prior to enunciating the Golsen doctrine, we had considered what we should do when an issue comes before us a second time: after a Court of Appeals has reversed a prior Tax Court decision on the same point. In Lawrence v. Commissioner, 27 T.C. 713, 716-717 (1957), revd. 258 F.2d 562 (9th Cir. 1958), we determined that, while certainly we should seriously consider the reasoning of the reversing Court of Appeals, we ought not follow its decision if we believe it incorrect.
if still of the opinion that its original result was right, a court of national jurisdiction to avoid confusion should follow its own honest beliefs until the Supreme Court decides the point. The Tax Court early concluded that it should decide all cases as it thought right. [Id.; fn. refs, omitted.]
We continued:
The Commissioner of Internal Revenue, who has the duty of administering the taxing statutes of the United States throughout the Nation, is required to apply these statutes uniformly, as he construes them. The Tax Court, being a tribunal with national jurisdiction over litigation involving the interpretation of Federal taxing statutes which may come to it from all parts of the country, has a similar obligation to apply with uniformity its interpretation of those statutes. That is the way it has always seen its statutory duty and, with all due respect to the Courts of Appeals, it cannot conscientiously change unless Congress or the Supreme Court so directs. [Id. at 719-720.]
B. Criticism of Lawrence and Emergence of the Golsen Doctrine
The Lawrence doctrine has little to recommend it, however, where a case in the Tax Court is appealable to a Court of Appeals that previously has taken a position on precisely the same issue. In such a case, it would appear a virtual certainty that the nonprevailing party will appeal and secure a reversal from the Court of Appeals. In such a circumstance, the application of the Lawrence doctrine would ensure the waste of substantial resources, both of the taxpayer and of the court system, and, ultimately, achieve nothing.
Accordingly, we created, in Golsen v. Commissioner, supra, a narrow exception to the Lawrence doctrine. We there reasoned that, where a reversal would appear inevitable, due to the clearly established position of the Court of Appeals to which an appeal would lie, our obligation as a national court does not require a futile and wasteful insistence on our view.
Notwithstanding a number of the considerations which originally led us to * * * [the Tax Court’s position], it is our best judgment that better judicial administration requires us to follow a Court of Appeals decision which is squarely in point where appeal from our decision lies to that Court of Appeals and to that court alone. [Id. at 757; emphasis added; fn. refs, omitted.]
It should be emphasized that the logic behind the Golsen doctrine is not that we lack the authority to render a decision inconsistent with any Court of Appeals (including the one to which an appeal would lie), but that it would be futile and wasteful to do so where we would surely be reversed. Accordingly, bearing in mind our obligation as a national court, see Lawrence v. Commissioner, supra, we should be careful to apply the Golsen doctrine only under circumstances where the holding of the Court of Appeals is squarely on point. See Golsen v. Commissioner, supra at 757.
C. Does the Golsen Doctrine Apply ?
1. Kelley v. Commissioner and the Ninth Circuit Position
In Kelley v. Commissioner, 877 F.2d 756 (9th Cir. 1989), the Ninth Circuit considered whether “the return” referenced by section 6501(a) is that of the taxpayer or that of the source entity where the source entity is an S corporation. Kelley considered at length the proper interpretation of section 6037, a provision applicable to S corporations (but not to grantor trusts). The Ninth Circuit stated the issue as follows:
Section 6037 requires S corporations to file returns each year and provides that “[a]ny return filed pursuant to this section shall, for purposes of chapter 66 (relating to limitations), be treated as a return filed by the corporation . . . .” I.R.C. §6037. The parties dispute the meaning of this section. The Commissioner argues that this provision means that the statute of limitations is triggered by the filing of the informational return only if it is determined that the corporation itself owes a tax because of an invalid election or because one of the exceptions applies. * * * The taxpayers contend that the provision means that no adjustments can be made based on any item on the S corporation’s return after the statute of limitations has run on the corporation’s return, even if the adjustment would create a deficiency only at the shareholder level. [Id. at 758.]
The Ninth Circuit determined that section 6037, on its face, would require a ruling for the taxpayers. “With certain inapplicable exceptions a corporation’s income tax return cannot be questioned after three years from the date the return is filed. See I.R.C. §6501. A literal construction of section 6037 would similarly seem to bar adjustments to an S corporation’s return after the three year period.” Id. The Ninth Circuit then considered the legislative history of section 6037 to determine whether it sufficiently undermines the literal construction to require a different construction, and concluded that it does not.
This Senate Report does not indicate that section 6037 means the S corporation’s return is treated as a corporate return only if the corporation itself is determined to owe tax. * * * If Congress had intended the example to swallow the language of the text, Congress could easily have written the statute to provide that the period of limitations will run from the date of filing of the return required under section 6037 only in instances of a subsequent determination that a corporation was not entitled to the benefits of subchapter S. [Id. at 759.]
We believe that the Ninth Circuit thought it inconsistent to allow an adjustment to the return of a shareholder of an S corporation, for an item of the S corporation, after the period of limitations to make adjustments to the return of the S corporation had expired.6 Accordingly, the Ninth Circuit held that the IRS may not adjust a shareholder’s return based on an adjustment to an S corporation’s return when the period of limitations has run on the latter’s return. Id.
At the very least, therefore, Kelley stands for the proposition that, in light of section 6037, the return referenced by section 6501(a) is not that of the taxpayer, but that of the source entity, where the source entity is an S corporation. Id. It is not clear, however, how the Ninth Circuit would interpret section 6501(a) in the absence of any interplay with section 6037 — that is, where the source entity is not an S corporation (and, as a result, section 6037 is inapplicable).
Three possible viewpoints (at least) could be consistent with Kelley. First, it might be the Ninth Circuit’s view that the return referenced by section 6501(a) is always that of the source entity. That conclusion might be reached in two steps: One, the return referenced by section 6501(a) must either be (i) always that of the taxpayer, or (ii) always that of the source entity;7 two, since section 6037 makes clear that, where the source entity is an S corporation, the return referenced by section 6501(a) is that of the source entity, the return in question cannot always be that of the taxpayer and, consequently, must always be that of the source entity (except, perhaps, for those source entities never liable for Federal income tax). It should be emphasized that, under that view, section 6037 merely illuminates, but does not modify, the meaning of section 6501(a).
Second, it might be the Ninth Circuit’s view that section 6037 modifies section 6501(a), whose reference to “the return”, otherwise, would always signify that of the taxpayer. Under that view, the return referenced by section 6501(a) is always that of the taxpayer, except that section 6037 imposes a narrow exception to that rule, applicable only when the source entity is an S corporation.
Third, the Ninth Circuit may have declined to decide what return might generally be referenced by section 6501(a) where the source entity is not an S corporation: the Ninth Circuit may have reasoned that, even assuming, arguendo, that section 6501(a) generally refers to the taxpayer’s return, section 6037 modifies that rule where the source entity is an S corporation. In other words, the Ninth Circuit may have decided that, due to section 6037, S corporations present an easy case — and hard cases may be left for another day.
Unfortunately, we cannot definitively say which, if any, of the above viewpoints is that of the Ninth Circuit.
2. Is Kelley Squarely on Point?
We must consider whether Kelley v. Commissioner, 877 F.2d 756, 759 (9th Cir. 1989), revg. and remanding T.C. Memo. 1986-405, is so clearly on point that it would be futile to decide this case as we think right. As stated, we think the scope of Kelley’s rationale is unclear. Recently, we read Kelley as controlling only where the source entity is an S corporation, observing that “The Ninth Circuit’s analysis and holding in Kelley were based upon the above-quoted language of section 6037”. Stahl v. Commissioner, 96 T.C. 798, 800 (1991). While that may not be the only reading of Kelley, we are confident that it is a permissible one.8 Consequently, it is not clear that the Ninth Circuit would disagree with our conclusion that, where the source entity is a grantor trust, the return referenced by section 6501(a) is that of the taxpayer. Accordingly, the Golsen doctrine is inapplicable and we are obliged to decide this case as we think right. See Golsen v. Commissioner, 54 T.C. 742 (1970), affd. 445 F.2d 985 (10th Cir. 1971); Lawrence v. Commissioner, 27 T.C. 713 (1957), revd. 258 F.2d 562 (9th Cir. 1958).
Before closing, we note that the Ninth Circuit’s holding in Kelley might apply only to section 6037 as it existed prior to the Subchapter S Revision Act of 1982 (the 1982 Act), Pub. L. 97-354, 96 Stat. 1669.9 Certain provisions of the 1982 Act support the conclusion that, at least after 1982, section 6037 applies only when the S corporation is to be taxed separately. Under the 1982 Act, Congress extended the audit and litigation procedures previously made applicable to partnerships (by the Tax Equity and Fiscal Responsibility Act of 1982 (tefra), Pub. L. 97-248, sec. 402(a), 96 Stat. 648) to S corporations, obviating the need for the Commissioner to examine separately the return of each shareholder. Secs. 6221-6232, 6241-6245; Fehlhaber v. Commissioner, 954 F.2d 653, 657 (11th Cir. 1992), affg. 94 T.C. 863 (1990) (Court reviewed). Those procedures provide for the unified treat-merit of all subchapter S items at the corporate level, particularly pass-through items, which could not otherwise be so treated. Notably, the 1982 Act provides a period of limitations on assessment of a tax attributable to S corporation items, which period commences upon the filing of the S corporation return. Secs. 6229(a), 6244. The creation of such special procedures for adjusting pass-through S corporation items at the entity level, including a provision limiting the time period for so doing, seems inconsistent with the view that section 6037, at least after 1982, is required to accomplish that same objective. Indeed, at the time of the 1982 Act, Congress understood section 6037 to apply only when the S corporation itself, as opposed to its shareholders, was to pay tax:
Under present law, a taxpayer’s individual tax liability is determined in proceedings between the Internal Revenue Service and the individual whose tax liability is in dispute. Thus, any issues involving the income or deductions of a subchapter S corporation are determined separately in administrative or judicial proceedings involving the individual shareholder whose tax liability is affected. Statutes of limitations apply at the individual level, based on the returns filed by the individual. The filing by the corporation of its return does not affect the statute of limitations applicable to the shareholders. [S. Rept. 97-640 (1982), 1982-2 C.B. 718, 729; emphasis added.]
Thus, regardless of what section 6037 may have meant before the 1982 Act, there are reasonable grounds to suppose that the Ninth Circuit might read the post-1982-Act section 6037 differently than it read the pre-1982-Act section 6037 in Kelley.
We hold that section 6501(a) refers to the taxpayer’s return, and not that of the source entity, where such source entity is a grantor trust. Accordingly, respondent’s notices of deficiency were timely issued, inasmuch as the period for assessment, as to petitioners’ individual tax returns, had not expired at the time such notices were issued.
Decisions will be entered under Rule 155.
Reviewed by the Court.
Hamblen, Chabot, Parker, Cohen, Clapp, Swift, Jacobs, Wright, Parr, Wells, Ruwe, Whalen, Colvin, and Beghe, JJ., agree with the majority opinion. APPENDIX
The notice of deficiency for taxable years 1983 and 1985 was mailed on September 12, 1989, to petitioners John and Shirley Lardas (John and Shirley). John and Shirley’s 1983 and 1985 joint Federal income tax returns were filed on August 15, 1985, and October 21, 1986, respectively. A Form 872-A(C) (Special Consent to Extend the Time to Assess Tax) for the 1983 taxable year was executed during July 1987 and terminated no sooner than 90 days from August 25, 1989, the date on which the Internal Revenue Service (the Service) received John and Shirley’s Form 872-T (Notice of Termination of Special Consent to Extend Time to Assess Tax). A Form 872 (Consent to Extend the Time to Assess Tax) for the 1985 taxable year was executed during March 1989 to extend the period through October 15, 1990, which period was terminated no sooner than 90 days from July 26, the date on which the Service received John and Shirley’s Form 872-T (Notice of Termination of Special Consent to Extend Time to Assess Tax). The periods for assessment had not expired with respect to John and Shirley’s 1983 and 1985 tax returns as of September 12, 1989, when respondent mailed a notice of deficiency to them.
Respondent mailed notices of deficiency to petitioners Angelo and Janet Lardas (Angelo and Janet) on September 26, 1989, for the 1983 taxable year and on September 25, 1989, for the 1985 taxable year. Angelo and Janet’s joint Federal income tax returns for 1983 and 1985 were filed August 17, 1984, and October 14, 1986, respectively. A Form 872-A(C) (Special Consent to Extend the Time to Assess Tax) for the 1983 taxable year was executed during July 1987, and terminated no sooner than 90 days from July 28, 1989, the date on which the Service received Angelo and Janet’s Form 872-T (Notice of Termination of Special Consent to Extend the Time to Assess Tax). A Form 872-A (Special Consent to Extend the Time to Assess Tax) for the 1985 taxable year was executed during April and May 1989, and terminated no sooner than 90 days from July 28, 1989, the date on which the Service received Angelo and Janet’s Form 872-T (Notice of Termination of Special Consent to Extend the Time to Assess Tax). The periods for assessment had not expired with respect to Angelo and Janet’s 1983 and 1985 tax returns as of September 26 and 25, 1989, when respondent mailed the notices of deficiency to them.
John and Angelo were grantors and beneficiaries of the Square D Trust (Square D) and the SCB Trust (scb). Square D and scb were formed pursuant to declarations of trust dated December 31, 1982, and December 1, 1983, respectively. Both trusts were involved in equipment leasing. Jerry Minsky (Minsky) served as trustee of both trusts and was responsible for the management and record keeping of each trust. On petitioners’ respective 1983 and 1985 Federal income tax returns, each had claimed losses in connection with the equipment-leasing activity of Square D and scb. Respondent, in the various notices of deficiency, disallowed the claimed losses.
A Form 1041 (U.S. Fiduciary Income Tax Return) was filed for SCB’s 1985 calendar year on which it was specified that SCB was a grantor trust. On each of the lines of the U.S. fiduciary return Form 1041 which required key reporting data (e.g., total income and balance of tax due) the form had been marked “N/A”, ostensibly for “not applicable”. No figures were set forth on the two-page Form 1041. On a prominent portion of the front page of the form, however, the words “Grantor Trust See Attached Schedule” had been typed. The jurat had been signed and dated April 10, 1986, by Minsky. Attached to the Form 1041 were 10 single-page documents each entitled “Grantor Tax Information Letter”. Each such document contained the name of the trust, trustee, and name and address of a particular beneficiary. Below this descriptive information was the statement: “Enter The Amounts Listed Below On Your U.S. Income Tax Return”, which was followed by amounts of income, deductions, and a loss, along with certain other information concerning tax preference items, net investment income, and excess expense of net lease property. Respondent received the Form 1041 for sob’s 1985 calendar year on April 14, 1986. The Form 1041 filed for SCB’s 1983 calendar year was received by respondent on April 15, 1984. No consents were executed to extend the period for assessment in connection with scb.
Square D’s Forms 1041 for its calendar years 1983 and 1985 were similar in most respects to the Forms 1041 filed on behalf of SCB. Square D’s 1983 and 1985 Forms 1041 were received by respondent on March 21, 1984, and April 14, 1986, respectively. Minsky, as trustee of Square D, entered into a consent to extend the period for assessment for 1983 to December 31, 1987. Square D was designated as a grantor trust on each of its Forms 1041.
Respondent, by a letter dated April 11, 1989, notified SCB of examination adjustments to its 1983 and 1985 years. In explanations attached to the April 11 letter, it was indicated that all losses were being denied. The April 11 letter also contains the statement: “The effect of these proposed adjustments on the income tax liability of each partner, shareholder, beneficiary, or grantor will be shown in separate examination reports that will be sent to them.” An identical form letter dated July 31, 1987, had been sent to Square D for its 1983 year, along with a more detailed explanation for the disallowance for the claimed losses. The form letter was sent to Square D on March 23, 1989, for the 1985 taxable year.
At the time the notices were sent to petitioners, more than 3 years had expired since the filing of the 1983 and 1985 Forms 1041 for scb and Square D.
These cases have been consolidated for purposes of trial, briefing, and opinion. We consider here a single issue which is common to both cases and, if favorably decided for petitioners, will be dispositive. If the issue is unfavorably decided for petitioners, the parties have settled some of the remaining issues and have agreed to be bound by the outcome of another case regarding the final remaining issue.