Page:United States Statutes at Large Volume 68A.djvu/378

 338

INTERNAL REVENUE CODE OF 1954

before the Tax Court of the United States, in writing, that he was entitled to such deduction or credit for the taxable year to which the determination relates. (3) EXISTENCE OF RELATIONSHIP.—In case the amount of the adjustment would be assessed and collected in the same manner as a deficiency (except for cases described in section 1312(3)(B)), the adjustment shall not be made with respect to a related taxpayer unless he stands in such relationship to the taxpayer at the time the latter first maintains the inconsistent position in a return, claim for refund, or petition (or amended petition) to the Tax Court of the United States for the taxable year with respect to which the determination is made, or if such position is not so maintained, then at the time of the determination. SEC. 1312. CIRCUMSTANCES OF ADJUSTMENT.

The circumstances under which the adjustment provided in section 1311 is authorized are as follows: (1)

DOUBLE INCLUSION OF AN ITEM OF GROSS INCOME.—The

determination requires the inclusion in gross income of an item which was erroneously included in the gross income of the taxpayer for another taxable year or in the gross income of a related taxpayer. (2)

DOUBLE ALLOWANCE OF A

DEDUCTION

OR CREDIT,—The

determination allows a deduction or credit which was erroneously allowed to the taxpayer for another taxable year or to a related taxpayer. (3)

DOUBLE EXCLUSION OF AN ITEM OF GROSS INCOME.—

(A) ITEMS INCLUDED IN INCOME.—The determination requires the exclusion from gross income of an item included in a return filed by the taxpayer or with respect to which tax was paid and which was erroneously excluded or omitted from the gross income of the taxpayer for another taxable year, or from the gross income of a related taxpayer; or (B) ITEMS NOT INCLUDED IN INCOME.—The determination requires the exclusion from gross income of an item not included in a return filed by the taxpayer and with respect to which the tax was not paid but which is includible in the gross income of the taxpayer for another taxable year or in the gross income of a related taxpayer. (4) D O U B L E DISALLOWANCE OF A DEDUCTION OR CREDIT.—The

determination disallows a deduction or credit which should have been allowed to, but was not allowed to, the taxpayer for another taxable year, or to a related taxpayer. (5) CORRELATIVE DEDUCTIONS AND I N C L U S I O N * FOR TRUSTS OR ESTATES AND LEGATEES, BENEFICIARIES, OR HEIRS.—The determi-

nation allows or disallows any of the additional deductions allowable in computing the taxable income of estates or trusts, or requires or denies any of the inclusions in the computation of taxable income of beneficiaries, heirs, or legatees, specified in subparts A to E, inclusive (secs. 641 and following, relating to estates, trusts, and beneficiaries) of part I of subchapter J of this chapter, or corresponding provisions of prior internal revenue laws, and the correlative inclusion or deduction, as the case may be, has been erroneously excluded, omitted, or included, or disallowed, omitted, or allowed, as the case may be, in respect of the related taxpayer. §1311(b)(2)(B)

�