five and under what context does it apply when the are dealing with a case that involves a summary judgment motion secondly should value this case stems from a long term ongoing audit that involved a restaurant tour this restaurant tour  in and completed the remainder of the examination during that time of the examination of the taxpayer put forth an effort to clean up his house and provide the iris with the proper filing of his tax returns and showing of his expenses in doing so he had to relinquish the previous accountant who showed himself to provide of somewhat of sloppy accounting work in that process the well that's one interpretation right the other interpretation was that mr mercer did not provide him with all the information he needed such as the cash payments to family members as wages that is an interpretation your honor and the one that kind of belies the actual case than the trial and the because if you look at the the record on that in terms of the trial and you understand the practices and procedures of accounting you note that the replacement accountant indicated that on the very documents that would be called that he under reported receipts to the tune of one point six million dollars during that years in question here and was paying under the table cash wages and himself maintained grossly inadequate records and offered a number of shifting explanations for this well you know i don't want to make sure that the court is aware that there has never  it so you can't you can hardly say dan before this court try to put it on the accountant was operating under an extreme disadvantage because your client was behaving deceitful  i would i would remind the court that whether or not my client was acting in a manner of fraud that question has been answered and and concluded by the tax court  and that's not challenged here and that is not challenge here the question is even in light of fraud does the government have permission or do they have the right to disallow the legitimate business expenses that should be allowed as in determining what the actual tax liability should be whether or not fraud is present here is not the issue at hand what is at hand is the duty of taxpayer here at rule that the duty of consistency applies when there is a major question of material fact here genuine question of material fact here and that is how much did the government know when mr m presented his his wages to the government for examination and vote time so if i commit follow up on that counsel i understood your brief to be arguing you know sense that there was a kind of trying to argue what i believe is my argument this morning is that the government did a thorough job in the acted within their training and experience with the government argues that  don't i don't think counsel i don't think we're connecting on this because your well let me let me try to put it a little more bluntly how should the i r s have figured out that your client was paying undisclosed cash wages before he filed those amended returns the i r s did figure out a way before that because   information that flows on to that the employee is w two forms that we force nine forty once they use that information very thoroughly in what's usually called an indirect method to  that there was a misrepresentation of the employment tax returns immediately that how how does our how does it pick that up because there is the reconciliation of what's on the pos system as it relates to tips that  how cash payments by mr moved off the books to relatives would show up in this automated system for a while the cash payments would not have shown up but it does not change the fact of whether or not the government relied on those misrepresentations when they know for sure that the return of the returns are incorrect louis president clearly different way your client twen tax liability that was old as a result of the mis representation the one of the one of the things you have to answer when you file an amended return like this is when did you discover the error right correct and he put may two thousand and twelve if i recall correctly and that's what the replacement accountant put down as a result of the cleaning up of the most his records and of and presenting to the i r s what the actual should have been so and that's very time but to what extent is your theory based on the notion that the i r s should have figured that out well before your client and his account agent agent valentine and the kids being referred to see id that the it that the agency was quite aware of the fraudulent activity on that particular account when as as early as january  thousand and ten ok but if so your theory is that the i r s should have figured this out by january or did figure it out by january two thousand and ten but the people actually engaged in the fraud didn't realize the mistake until may of two thousand and twelve is that the theory the theory is that the people in gauged in the fraud would have filed a tax return to for the employment taxes on may   round may of two thousand and twelve to correct what they had already was represented to the government as you amended tax returns which had been accepted by the heiress and many occasions  many instances of all of the changes in the adjustments made you notice here out of that most of all the adjustments made in the amended returns were accepted by the aged the agent did a thorough examination of the amended returns and accepted most of the of the changes made by the replacement accountant the the here at the exe at the point of examination there is no the record there is no representation made by the agent that the only reason they're not allowing these wages is because of a duty of inconsistency that argument doesn't exist until much later when when that the litigation aspects of this audit is clear that the agent koncz made a conscious decision that instead of making the a change to the image of the employment tax returns instead of giving imputing the actual taxable that was supposed to be calculated for the the taxpayer she made a conscious decision based on her testimony at trial that she was going to one imputed income into mr mo actual income by taking off the pos system tip income that was reflected on those pos systems taking sales tax was also reflected on those pos systems and imputing that as income to the tax where they an employment tax returns until after the period for assessing employment taxes and employee income tax had expired the answer to this question as the tax court found is provided by the duty of consistency which is a tax doctrine akin to judicial stoffel the duty of consistency recognizes that our tax system is one of self reporting and that the commissioner can and generally must rely on the taxpayers assertions in returns in assessing tax so it imposes on taxpayers the equitable responsibility to report transactions which have an impact on different taxable periods or different taxes in a consistent manner so in other words it's it's really a method of ensuring compliance as much as it is protect the commissioner against whistle so i think it's important that we be real clear on the dates here there are four years at issue two thousand and six to two thousand and  and for the all for those years the taxpayer mid lee under reported the wages on his employment tax returns and there by under reporting those wages then paid less in employment tax he also enabled the employees who receive those wages to escape income taxation  escaped penalties associated with that and personal responsibility that would accrue under section sixty six seventy two of the code and and the i r s having no knowledge of the cash payments on the table when the employment tax returns are received and the w to use or received assessed tax accordingly relied on those statements and i don't think there's any dispute that the i r s relied on the employment tax returns when they were filed the question is if later on then the taxpayer attempts to deduct more wages than he previously reported is that enough to put the i r s on notice does that and so you know the dates of this the there's two sets of amended returns there's the amended income tax returns which are the tax tax payers personal income taxes and those are the ones on which he was attempting to deduct the wages then there is a minute returns with respect to the employment taxes he filed in amended returns where he tried to deduct these wages in two thousand and eleven he didn't file a returns with respect to the employment taxes until correcting the error in which he would have to pay the tax until two thousand and thirteen well by that time the i r s could no longer assess these taxes it was beyond the statue limitations and so it was so he wants to benefit from his fraud right effectively he is seeking unjust enrichment he wants to benefit from the very wrongdoing and me concedes that he knew at least as of may two thousand and twelve that he was under reporting this income i mean there's testimony that he intentionally did not put his family members on the payroll so they wouldn't have to pay tax he says is a taxpayer is it's an equitable rule that says the taxpayer cannot benefit from his own for a that's what the supreme court held back in one thousand thirty two and it's what every court is held sense it should be the rule applied to this case and and we would be quite a windfall to permit him to deduct these wages when the i r s could not collect the employment tax could not go after the employees was barred from assessing those taxes there was no tax against which to apply the payments so the so the iris was obligated then to refund those amounts with interest are you kidding it's voluntarily a global taxpayer can't waive the statute of limitations on what the tech did that the taxpayer in the iris can agree to extend the statute of limitations right but it does require the consent of the taxpayers or  there's a couple of other issues i don't know they didn't really get discussed in the opening argument i think was one was about the taxpayers most to recall a witness that had already testified i just the way that that issue was teed up in the opening statement of the council was that should we allow evidence to be admitted without allowing this gentleman just to testify again regarding what that evidence means and i just point out that the taxpayer didn't object to the introduction of this evidence and the evidence was just a list of ten bank accounts he consented to the admission of that evidence so that the issue is not really should we allow the evidence i think he consented to that issue is whether or not he can then put a witness back on the stand to ask him a question that he already asked him about the number of bank accounts the taxpayer and then you know months after the fact after after the guys had an opportunity go back look through his records do a little research and figure out what these accounts are about he already had the opportunity to prevent to present this evidence in because he already has that opportunity it was not imposed additional penalties and poles and taxes owed by the taxpayer would be in the range of one hundred forty seven thousand dollars the benefit to the taxpayer would have been  three hundred fifty eight thousand dollars and so when you take the numbers and when you add those numbers up basically arse attract those numbers basically the government gets a benefit of two hundred eighty thousand examination the government made the decision that instead of picking up the tax returns for examination because they did request the tax returns and they did thorough examination of those tax returns what they did not do on three separate occasions where the extent of the statue limitation for the employment tax they did not extend the statute of limitations for the i mean for the income tax they did not extend the statute limitations for the employee plummet tax locking in and additional have accidently half a million dollars that they imputed as income to the taxpayer this decision on as it relates to do consistency was done by the the i r s is conscious choice that the best way to sanction these bad acts of fraud here was to lock in  and it seems like you are the count of so fortunate the food criminal division decided not to go forward i understand that your honor and i appreciate that the only point that i would point out here is  taxpayer took forth and put forth an amazing amount of effort to try to correct these errors and for the most part did the only the only major deduction that the i r s refused to allow that that conflicts with the findings on the fraud i'm sorry that conflicts with the findings on the fraud which you have not contested that is correct we have not contested the fraud right and there is a finding that your client failed to adequately cooperate