You are the owner and chief operating officer of a Subchapter S corporation, which reports on the cash basis of accounting. For years, you have been reporting amounts received toward the end of the calendar year as having been received only when they were deposited the following January. In several instances, this has had the effect of shifting income forward into a later year, deferring your tax liability on the passthrough amounts. Eventually, the Internal Revenue Service (“IRS”) catches on, and after examining the three returns for which the limitations period has not already closed, issues deficiency notices on the two older returns, with penalties, and acknowledges an overpayment in the most recent year. You file a timely petition with the Tax Court to adjust the deficiency assessed for the earliest year, point- ing out that in recalculating gross receipts for that year, IRS did not back out the amounts ...