Millsap v. Commissioner

91 T.C. No. 58, 91 T.C. 926, 1988 U.S. Tax Ct. LEXIS 142

Opinions

GERBER, Judge:*

Respondent, in a notice of deficiency dated February 12, 1985, determined deficiencies in petitioner’s income tax and additions to tax as follows:

Additions to tax

Taxable Income

year tax Sec. 6651(a)(1)¹ Sec. 6653(a)(1) Sec 6653(a)(2) Sec. 6654(a)

1979 $11,759.60 $2,349.79 $587.98 N/A $366.97

1980 8,900.53 1,439.20 445.03 N/A 317.31

1981 22,639.10 5,659.78 1,131.96 ** 1,738.85

1982 47,150.43 11,787.61 2,357.52 4,589.98

Totals 90,449.66 21,236.38 4,522.49 7,013.11

N/A - Not applicable

** 50 percent interest due on $22,639.10

*** 50 percent interest due on $47,150.43

The parties have settled all issues but one. The sole issue remaining for our consideration is whether petitioner is entitled to use “married filing jointly” rates for the taxable years in question. More specifically, we must consider the interrelationship of respondent’s ability to “execute a return” under section 6020(b) and petitioner’s election to file a joint return after the filing of a separate return under section 6013(b). In this connection, we must also consider the effect of respondent’s execution of a return under section 6020(b) upon a taxpayer’s right to deficiency procedures with respect to income tax issues.

FINDINGS OF FACT

This case was submitted fully stipulated² pursuant to Rule 122. The stipulation of facts and attached exhibits are incorporated by this reference.

Petitioner resided in Scottsdale, Arizona, at the time his petition herein was filed. For the taxable years 1979, 1980, 1981, and 1982, petitioner failed to file timely Federal income tax returns. During each taxable year in issue, petitioner was married to Carol Millsap, who did not file separate returns and with whom petitioner could have filed a joint Federal income tax return.

Respondent’s revenue agent conducted an examination of petitioner’s income tax liability and his failure to file returns for the years in issue. Respondent’s agent’s report of examination (Form 4549-A) was dated April 16, 1984. On April 24, 1984, respondent’s agent caused the filing of the first page of a U.S. Individual Income Tax Return (Form 1040) for each of the taxable years 1979 through 1982 at the Internal Revenue Service Center, Memphis, Tennessee. Each of the single page Forms 1040 contained petitioner’s name, address, social security number, and the “Filing Status” was designated as “Single.” The words “SUBSTITUTE FOR RETURN PREPARED IN INDPL”³ were handwritten on the top of each of the four single-page documents. Although these single-page-form documents were not subscribed and did not contain income or deduction information, respondent’s agent attached his report (Form 4549-A) to the document. Respondent’s agent’s report contained explanations of items of income, allowance of a personal exemption, and a standard deduction for each taxable year. The agent’s report contained the statement: “Filing status for all years is married filing separate. Section 1.6013-1, of the Income Tax Regulations states that in order for a husband and wife to avail themselves of joint return rates, a joint return must be elected by filing a joint return with both spouses signing such return.” The agent’s report form was subscribed but the signer’s signature is unclear.⁴

On February 12, 1985, respondent mailed a notice of deficiency to petitioner. The deficiencies were determined using the tax rates for married taxpayers filing separately. Petitioner, on May 13, 1985, caused a petition to be filed with this Court. During January 1986, petitioner and his wife filed Federal income tax returns (Forms 1040), for the years in question, electing joint filing status on each return. Petitioner does not now dispute the amount of income determined by respondent. Petitioner and respondent disagreed about deduction items. The parties have settled all questions concerning deductions and other items other than the question of whether petitioner is entitled to utilize joint return rates.⁵

OPINION

We focus here upon whether the “substitute” returns “filed” by respondent, under circumstances where petitioner and his wife had not timely filed returns, constitute a “separate return[s]” for purposes of section 6013(b).

Section 6013(a) enables “a husband and wife [to] make a single return jointly of income taxes * * * even though one of the spouses has neither gross income nor deductions.” In the circumstances of this case, the computation of the tax based upon the joint tax rates, rather than separate rates, would result in a reduced tax liability for petitioner. Section 6013(b)(1) permits the election of a joint return, after a separate return has been filed, under specified circumstances. Section 6013(b)(2)(C) would preclude the filing of a joint return after a separate return had been filed if respondent had mailed a notice of deficiency to either spouse and a petition, concerning said notice, is filed with this Court. Jacobson v. Commissioner, 73 T.C. 610, 614 (1979).

In a recent opinion we addressed a situation, similar to the one in the present case, where respondent attempted to “file” a substitute return under section 6020(b) (before the taxpayer attempted to untimely file), thus precluding the taxpayer from using joint rates. In that case, we held that the “returns” filed by respondent were “dummy” returns and not “substitute” returns within the meaning of section 6020(b), and thus did not preclude that taxpayer from utilizing joint return rates with respect to the tax liability under consideration. Phillips v. Commissioner, 86 T.C. 433, 437-438 (1986), affd. in part, revd. in part 851 F.2d 1492 (D.C. Cir. 1988) (Phillips).⁶ Although we referenced respondent’s section 6020(b) authority to make returns where none is filed by a taxpayer, our Phillips opinion did not reach the question of whether a “section 6020(b) return” is the type of return contemplated in section 6013(b). Although we did not directly address that issue in Phillips, our prior opinions have held that the filing of substitute returns by respondent reporting or reflecting single or married but filing separately rates constituted elections which precluded taxpayers from electing joint rates in those cases. A discussion of those cases appears on pages 932 through 934, infra. A concurring opinion in Phillips, however, reasoned that section 6013(b) specifically references returns “filed by an ‘individual’ ” and a return prepared and filed by respondent under section 6020(b) is not “filed by an individual.” Phillips v. Commissioner at 442-443.

The returns utilized by respondent in this case are not “dummy” returns as found in Phillips, but constitute “substitute” returns within the meaning of section 6020(b). Here, unlike Phillips, respondent attached sufficient information to the Forms 1040 to compute the tax liability. Furthermore, the attached report was subscribed. The Forms 1040 in conjunction with the revenue agent’s report⁷ proposing items of income, deductions, filing status, etc., provide sufficient information from which the tax may be computed. See Phillips v. Commissioner, supra. Also see Conovitz v. Commissioner, T.C. Memo. 1980-22, where an incomplete Form 1040, in conjunction with a Form 1902E (explanation of adjustments), were found to constitute a “substitute return” for purposes of section 6020.

In the present case, we are squarely confronted with the issue of whether a section 6020(b) “substitute” return is a “return” within the context and meaning of section 6013(b). More specifically, we must consider whether the language of section 6020(b) would permit the respondent to preempt deficiency procedures for issues concerning a taxpayer’s filing status.

Section 6020(b) authorizes the Commissioner of Internal Revenue (Commissioner) to prepare a return on behalf of a taxpayer who fails to file a return.⁸ The predecessors of section 6020(b) date back to section 14 of the Act of June 30, 1864, ch. 173, 13 Stat. 226. Revised Statute 3176 provided that the assistant assessor was, under specified circumstances where a taxpayer failed to do so, entitled to prepare a “list or return” for purposes of assessment. The obvious object of such authority was to provide the essential “list or return”⁹ upon which to base an assessment.¹⁰ Without an assessment, the Government is generally unable to collect the tax and/or establish hens on property. See sec. 6301 et seq. It was not until 1924,¹¹ however, that deficiency procedures became available to taxpayers and were established as a prerequisite to the Government’s ability to assess and collect certain types of tax. Prior to 1924, all types of tax were assessable and collectable without deficiency procedures.¹²

In their current form, the basic deficiency procedures are contained in sections 6211 through 6215. Respondent is not entitled, with few exceptions,¹³ to assess income tax until after the proper mailing of a notice of deficiency and, if petitioned, until the decision of this Court becomes final. Sec. 6213(a). Accordingly, the historical and traditional purpose of a return prepared and filed by the Commissioner would be suspended or would not take effect until the deficiency procedures are first completed. If the return respondent prepares under section 6020(b) authority is literally treated as “prima facie good and sufficient for all legal purposes,” respondent could ignore the deficiency procedures. This is because the return is a consent to assessment of tax in our tax system. See sec. 6201(a)(1) and sec. 1.6201-l(a)(l), Income Tax Regs. Congress has recognized that literal application of section 6020(b) may create anomalous results and has provided some explicit safeguards: The “execution of a return by the [respondent] pursuant to [section 6020(b)] shall not start the running of the period of limitations on assessment and collection.” Sec. 6501(b)(3). Accordingly, we must consider whether section 6020(b) should be literally applied, in a deficiency procedure setting, to preclude¹⁴ petitioner’s election to file a joint return pursuant to section 6013.

Our first consideration of this statutory interrelationship was in Goldberg v. Commissioner, 14 B.T.A. 465, 467 (1928) (Court-reviewed). In that case, the taxpayers had failed to file their 1923 and 1924 income tax returns and the Commissioner, pursuant to the authority in Revised Statute 3176, “filed” returns for the taxpayers showing their filing status as joint.¹⁵ The taxpayers sought to have their income reported or returned separately. As of that time, several cases had been decided unfavorably to taxpayers who had themselves filed returns electing either joint or separate filing status and were not entitled to change their election. ¹⁶ In an analogous manner, we decided that election by the Commissioner in a return “filed” under Revised Statute 3167 would likewise preclude election of a different filing status by taxpayers. This was a case of first impression. Moreover, this case of first impression was being considered in an historical environment which accepted the Commissioner’s statutory right to make a “return or list” for a taxpayer who failed to file. This “return” which the Commissioner had made and/or filed up until 1924 was sufficient to permit the assessment and collection of the tax by the Commissioner.

A dissenting opinion expressed disagreement with the holding, as follows:

I am of the opinion that section 3176 [of the Revised Statutes] has no application whatever to the matter of an election as to how a conjugal couple shall make their income-tax return. It only provides that, in the event no return be filed by the taxpayer, the Commissioner may, with such information as he may be able to obtain, make and subscribe a return for and on account of the taxpayer, and that such return so made shall be prima facie good for all legal purposes.

In the absence of a protest sustained, that return in law is sufficient to base an assessment upon, and enforce collection. But in the event of a protest on the part of the taxpayer, I know of no decision of any court or of this Board, prior to the one now being considered, that can be construed to hold that the return made by the Commissioner is binding on the taxpayer on any phase of such return.

[Goldberg v. Commissioner, 14 B.T.A. at 468. Emphasis supplied.]

The dissent continued with a discussion of the basis for holding taxpayers to their initial election.¹⁷

About 9 years later, in Taylor v. Commissioner, 36 B.T.A. 427, 429 (1937), (Taylor) (involving the Commissioner’s motion to dismiss for lack of jurisdiction) the Board of Tax Appeals did not permit the Commissioner to preclude or preempt deficiency procedures based upon a substitute return. In that case, the taxpayer failed to file a 1917 income tax return, and during 1935, the Commissioner “prepared and filed such return for [the taxpayer], pursuant to section 3176 of the Revised Statutes as amended.” The Commissioner “reported” over $10,000 in tax and over $5,000 in an addition to tax for 1917. Three days later, the Commissioner mailed a notice of deficiency to the taxpayer who petitioned the predecessor of this Court admitting that he owed $250.90 in tax for his 1917 taxable year. The Commissioner’s motion to dismiss for lack of jurisdiction was based on his contention that there was no deficiency determined because the amount shown on the notice of deficiency did not exceed the amount shown on the substitute return (which had been filed by the Commissioner). In denying the Commissioner’s motion to dismiss for lack of jurisdiction, the Board of Tax Appeals stated:

In the ordinary case where a return is filed by the taxpayer, the amount of tax shown thereon is admitted to be due, and in such case a deficiency is the amount of tax determined by respondent to be due in excess of that shown on the taxpayer’s return. But where a taxpayer shows an amount of tax on his return but does not admit that such amount is due and collectible, the amount admitted to be due and not the amount shown on the return is the starting point in computing a deficiency. [Taylor v. Commissioner at 429.]

Our holding in Taylor that we possessed jurisdiction to the extent that a taxpayer disagreed with the return as filed by respondent in a deficiency setting, is, we believe, the correct and intended congressional interpretation. To hold otherwise would both ignore and obviate the deficiency procedures upon which our jurisdiction is based. It would be no less anomalous to permit the Commissioner to “elect” filing status or resolve other differences which the taxpayer disputes under section 6020(b) in a situation where a taxpayer properly contests respondent’s determination and opts to petition this Court. Although we have not varied from the specific holding of Taylor as it relates to the income and deduction items, we have failed to afford taxpayers the same rights as they relate to filing status. This issue has not been formally¹⁸ addressed by this Court for many years. We have, with limited exception,¹⁹ merely accepted the rationale of earlier holdings without recognizing the effect that Taylor should have had upon the filing status issue.

Relying on Memorandum Opinions of this Court,²⁰ the Circuit Court of Appeals for the 10th Circuit held that the Commissioner can elect the filing status, by means of a return filed under authority of section 6020(b), of a taxpayer who has failed to file. Smalldridge v. Commissioner, 804 F.2d 125, 127-128 (10th Cir. 1986), affg. T.C. Memo. 1984-434. The 10th Circuit Court of Appeals places rebanee upon the rationale contained in the underlying Memorandum Opinion of this Court, as follows:

The Tax Court clearly recognized the present problem when it commented in its decision as follows:

Where a tax return is not timely filed by a taxpayer, and the Commissioner is required to make the joint or separate return election for the taxpayer in a notice of deficiency, that election may not thereafter be altered if the taxpayer files a petition with respect to the notice of deficiency with this Court. As stated previously by this Court—

the administrative considerations which accompany a system such as ours, where taxation is based upon voluntary disclosure, demand that where, “as a result of a failure to file a return, the Commissioner has been required to make an election for the taxpayers * * * that election may not thereafter be altered.” (emphasis added.)

[Smalldridge v. Commissioner, supra at 128. 48 T.C.M. 882, 883. Fn. ref. omitted.]

The rationale²¹ relied upon by the 10th Circuit and quoted in the Memorandum Opinion, was from our opinion in Durovic v. Commissioner, 54 T.C. 1364, 1402 (1970), affd. on this issue, revd. in part 487 F.2d 36, 41-42 (7th Cir. 1973), cert. denied 417 U.S. 919 (1974), (Durovic). We overruled our holding in Durovic, as pertinent to this discussion, in Phillips v. Commissioner, 86 T.C. 433, 441 (1986), affd. in part, revd. in part 851 F.2d 1492 (D.C. Cir. 1988). Our Durovic holding precluded a taxpayer, who had not yet filed a return, from electing a filing status other than the one determined by respondent in the notice of deficiency. This position was based upon a reading, albeit incorrect, of section 6013(b)(2). The Durovic rationale is founded upon an equitable concept and not upon a statutory requirement. Essentially, the Durovic rationale penalizes a taxpayer for failing to file and permits the Commissioner, whether informed or not, to “elect” and finalize the taxpayer’s fifing status. One might argue that this approach is appropriate in situations where a taxpayer willfully fails to fulfill his fifing responsibility. The Durovic rationale would be unjust and unfair for taxpayers whose failure was unintentional and/or justifiable. We overruled Durovic based upon respondent’s published position, congressional history underlying section 6013, and a plain reading of the statute. Phillips v. Commissioner, supra at 441. See also the discussion by the Claims Court in Tucker v. United States, 8 Cl. Ct. 575, 579-581 (1985). When considered in connection with deficiency procedures, there is no difference in theory or effect of treating respondent’s attempted election on behalf of a taxpayer any differently, whether set forth in a notice of deficiency or a substitute for return.

The plain language of section 6013(b) references a return filed by an “individual.” It is implicit in this language that taxpayers have the initial right to elect their filing status and that right concerns a part of a deficiency that is no less significant than the amount of the income and deductions determined in arriving at an income tax deficiency.²² Clearly, respondent is entitled to execute and file substitute returns for taxpayers who fail to do so themselves, but the substitute return should in no way preclude a taxpayer’s statutory right to a hearing on the deficiency and the elements that comprise it. Taylor v. Commissioner, 36 B.T.A. 427 (1937). The fifing status election is no different from any other adjustment that goes into the determination of a deficiency under section 6211 et seq.

We consider here the confluence of three statutory provisions enacted at different times for different purposes which: (1) Are not inherently ambiguous; (2) do not literally conflict with each other; but may (3) produce anomalous or unintended results in their application. Secs. 6013, 6020, and 6213. Further, the legislative history underlying these statutory provisions does not resolve the conflict or circuity. In this type of situation, we have been guided to “read the statutes to give effect to each if we can do so while preserving their sense and purpose.” Watt v. Alaska, 451 U.S. 259, 267 (1981); Haggar Co. v. Helvering, 308 U.S. 389, 394 (1940); Porter v. Commissioner, 288 U.S. 436 (1933). Where several statutory provisions conflict in their application, we should attempt to interpret or reconcile them in a manner which will not cause an arbitrary or an unreasonable result. Porter v. Commissioner, supra.

To treat the issue of a taxpayer’s filing status any differently than the issues involving deductions or income items would be arbitrary and without reason. A taxpayer is no less entitled to question respondent’s determination of filing status than he is any other determination. We have already recognized and accepted that respondent may not obviate or circumvent the deficiency procedures and/or this Court’s jurisdiction by means of section 3176 of the Revised Statutes (now section 6020) (Taylor v. Commissioner, supra), and we resolve this statutory conflict similarly. Our approach leaves section 6020 intact for situations where deficiency procedures are not available or have been foregone. It also advances a rational meaning for the word “individual” in section 6013(b), while providing appropriate preassessment Court review of all issues generated by respondent’s determination in this and other cases.

In view of the foregoing, we hold that in situations where deficiency procedures are availed of and a taxpayer has not filed a return, the taxpayer may file a return and contest respondent’s filing status determination, even though respondent has “filed” a substitute return under section 6020(b), in which filing status has been “elected” by respondent. To hold otherwise would be to cede jurisdiction as to the determination of filing status in all cases where no return has been filed to respondent for his absolute and final determination. Accordingly, we overrule the holding in Goldberg v. Commissioner, 14 B.T.A. 465, 467 (1928), and its progeny and decline to follow the 10th Circuit Court of Appeals’ holding in Smalldridge v. Commissioner, 804 F.2d 125, 127-128 (10th Cir. 1986), affg. T.C. Memo. 1984-434.²³

The circumstances of this case reflect that petitioner had not filed a return and respondent attempted to execute and file a return for petitioner electing individual or separate filing and tax rate status. About 9 months later, respondent mailed a notice of deficiency to petitioner and this proceeding was timely commended. Thereafter, petitioner, for the first time, filed returns seeking joint filing and tax rate status, which he would otherwise be entitled to do, unless the “returns” filed by respondent are considered returns for purposes of section 6013. We, accordingly, hold that the substitute returns in this case, prepared by respondent under section 6020(b), do not preempt or preclude petitioner’s right to contest the deficiency determined by respondent, including petitioner’s filing status under section 6013. Petitioner is entitled to and did elect joint filing status and rates for the taxable years 1979 through 1982.

To reflect the foregoing,

Decision will be entered under Rule 155.

Reviewed by the Court.

Whitaker, Korner, Shields, Clapp, Swift, Wright, Parr, and COLVIN, JJ., agree with the majority opinion. COHEN, J., concurs in the result only. NlMS, Chief Judge, dissents. RUWE, J., did not participate in the consideration of this case.

Footnotes

*

By order of the Chief Judge, this case was reassigned to Judge Gerber for decision and opinion.

1

Unless otherwise indicated, all section references are to the Internal Revenue Code of 1954 as amended and in effect during the years in issue. All Rule references are to the Tax Court Rules of Practice and Procedure.

2

Consideration of this case was delayed by petitioner’s bankruptcy proceeding which began subsequent to his petition in this Court. Under 11 U.S.C sec. 362(a)(8) (1982), an automatic stay of this Court’s case went into effect. The stay was modified and lifted to permit this Court “to proceed to conclusion, including the filing of an opinion and the entering of a final decision” by an Aug. 1, 1988, order of the U.S. Bankruptcy Court for the District of Arizona, Docket No. B-87-6539-PHX-GBN.

3

We assume that “INDPL” is an abbreviation for the city of Indianapolis.

4

The parties, in their stipulation of facts, did not address whether respondent’s agent’s report was properly subscribed. Due to the poor reproduction quality, the signature of the agent who prepared the report is not readily cognizable.

5

Although petitioner’s wife is not named as a party to this proceeding, that would not preclude petitioner from seeking to use joint rates.

6

In Phillips v. Commissioner, 86 T.C. 433 (1986), affd. in part, revd. in part 861 F.2d 1492 (D.C. Cir. 1988), we overruled Durovic v. Commissioner, 54 T.C. 1364 (1970), affd. on this issue 487 F.2d 36 (7th Cir. 1973), to the extent it prohibited the filing of a joint return after the issuance of notice of deficiency, even though no prior return had been filed. Also see Britt v. Commissioner, T.C. Memo. 1988-419.

7

Although the signature on the revenue agent’s report is not clear, the parties have not addressed the question of whether the report is properly subscribed or whether the signature is authentic and authorized. Instead, petitioner argues that the revenue agent’s report is merely a necessary procedural step in the administrative process and should not be considered a substitute for the notice of deficiency because it has been attached to a single page Form 1040.

8

Sec. 6020(b) provides:

Sec. 6020(b). Execution of Return by Secretary.—

(X) Authority of secretary to execute return — If any person fails to make any return required by any internal revenue law or regulation made thereunder at the time prescribed therefor, or makes, willfully or otherwise, a false or fraudulent return, the Secretary shall make such return from his own knowledge and from such information as he can obtain through testimony or otherwise.

(2) Status of returns. — Any return so made and subscribed by the Secretary shall be prima facie good and sufficient for all legal purposes.

9

The revised statute section required the assistant assessor to gather information, by summons and otherwise, to be able to complete a “list or return." Implicit in this authority was a requirement that the Government be knowledgeable before preparing a return on behalf of a taxpayer. Historically, our country’s revenue prior to the time of these revised statutes was sourced in property and excise taxes, and income taxes were added along with these Revised Statutes of 1864 and reinstituted by 1913 and 1916 Acts.

10

This concept is deeply rooted in our history. In part, our country was founded as the result of tax revolt wherein citizens protested being taxed without their consent. Our tax system is rooted in the concept of voluntary compliance which does not permit the Government to arbitrarily assess tax without a proper list or report.

11

The 1924 Act mandated deficiency procedures and the establishment of this Court’s predecessor, the Board of Tax Appeals, to provide a legal forum prior to payment of the tax. Revenue Act of 1924, 43 Stat. 253, 296-298, 336-338.

12

That is not to say that taxpayers were not notified of procedures and assessments prior to an assessment taking effect. It is to say that a taxpayer was not entitled to a day in court prior to payment of the entire tax (income, estate, and gift tax generally) and assessed interest before they were entitled to their day in court.

13

See, for example, secs. 6851 and 6861 for termination and jeopardy assessments which may precede deficiency procedures.

14

Under the circumstances of this case, sec. 6013(b) would preclude petitioner from now electing a joint return if respondent’s substitute return is to be considered a “return” for purposes of sec. 6013.

15

The taxpayers in Goldberg v. Commissioner, 14 B.T.A. 465, 467 (1928), resided in Texas, a community property State.

16

Macon v. Commissioner, 7 B.T.A. 450 (1927); Foster v. Commissioner, 7 B.T.A. 559 (1927); Torland v. Commissioner, 11 B.T.A. 35 (1928); Deposit Trust & Savings Bank, Executor v. Commissioner, 11 B.T.A. 706 (1928); Downes v. Commissioner, 5 B.T.A. 1029 (1927); Miller v. Commissioner, 6 B.T.A. 94 (1927).

17

The dissenter opined that “the right of election is not waived by laches.” Further, “The doctrine of election of remedies is generally regarded as being an application of the law of estoppel. (9 R.C.L. 957).” 14 B.T.A. at 469. These principles are the bases for the final conclusion that the Commissioner cannot make a binding election for the taxpayer in a situation where the taxpayer is contesting the Commissioner’s determination.

18

No reported or reviewed opinions considering the rationale underlying the filing status aspect of this issue have been issued since Taylor v. Commissioner, 36 B.T.A. 427, 429 (1937).

19

Seet for example, Conovitz v. Commissioner, T.C. Memo. 1980-22; Smalldridge v. Commissioner, T.C. Memo. 1984-434, affd. 804 F.2d 125 (10th Cir. 1986).

20

Smalldridge v. Commissioner, supra; Conovitz v. Commissioner, supra,

21

Our holding in Phillips v. Commissioner, supra, and in this case, as regards the rationale quoted above, is limited to the election of filing status.

22

In fact, the filing status affects the rate of tax to be applied to a specific amount of taxable income. See secs. 1 through 3. Depending upon the filing status, the rate for that status may produce a larger or smaller deficiency within the meaning of sec. 6211(a). The rate structure directly affects the amount of deficiency in the same manner as items of income and deductions. We should not be in the position of deciding which aspect of the deficiency a taxpayer may or may not contest — a responsibility reserved for Congress.

23

In accord with our holding in Golsen v. Commissioner, 54 T.C. 742 (1970), affd. 445 F.2d 985 (10th Cir. 1971), cert. denied 404 U.S. 940 (1971), we will follow Smalldridge v. Commissioner, supra, in all cases appealable to the 10th Circuit.