Federal Tax Folks, Please Help a Guy w/ a Procedural Q Forum

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What the hell is a rebate for the purposes of calculating a deficiency?

I understand it is supposed to be the excess of the amount reported by the taxpayer on his return over correct tax liability. But why would the IRS ever get to the notice of deficiency stage if it turns out that the taxpayer overstated his tax liability?

My best guess is that this only occurs when the taxpayer over reports his liability for one issue -- say capital gains -- but under reports his liability for another -- say taking a deduction when he shouldn't have. Is that it?

The examples in 301.6211-1 are useless.

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Ah man.