David Carkhuff and Tonja Carkhuff - Page 3

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          substantiated certain cost of goods sold and Schedule C expenses;           
          and (5) petitioners failed to report earned income credit                   
          recapture.  The addition to tax at issue is attributable to                 
          petitioners' late filing of their 1990 Federal income tax return,           
          and respondent asserted an accuracy-related penalty under section           
          6662(a), for tax years 1990 and 1991.                                       
               Petitioners invoked the jurisdiction of this Court by filing           
          a timely petition for redetermination.  In the petition, the sole           
          ground for petitioners' disagreement with the adjustments in the            
          notice of deficiency was that their "TAX RECORDS WERE NOT                   
          AVAILABLE WHEN REQUESTED".  After filing an answer to the                   
          petition, respondent attempted to schedule a conference for the             
          purpose of discussing the issues in the case.  On March 17, 1995,           
          in accordance with Branerton Corp. v. Commissioner, 61 T.C. 691             
          (1974), respondent sent a letter informally requesting                      
          petitioners to provide copies of all documents relevant to the              
          issues in the case by April 20, 1995.  The letter was sent by               
          certified mail, return receipt requested, to three different                
          addresses: petitioners' residence, petitioners' business, and in            
          care of their representative, A.E. Rheinheimer, Enrolled Agent.             
          Respondent received the return receipts indicating that                     
          petitioner, Tonja Carkhuff, signed for the letter addressed to              
          the business address, on March 18, 1995, and for the letter                 
          addressed to the residence, on March 30, 1995.  Furthermore,                
          respondent received a return receipt indicating that A.E.                   

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