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statements that he did have appeared to be unusually large in
relation to the amount of income reported on Lawrence's 1986
return.
After Agent Red was assigned Lawrence's examination, it was
expanded to include the year 1987, and she was duly notified
through her then representative. On August 14, 1990, at his
first meeting with Lawrence's representative, Agent Red expressed
his concern over the transactions occurring between Lawrence and
Abraham. Agent Red was told that the transactions reflected on
the bank statements were believed by the representative to be
loans and repayments between the two individuals. At this
meeting, Agent Red issued an information document request (IDR)
to Lawrence's representative requesting certain missing bank
statements; all books and records relating to Lawrence's business
activities; a list of all her bank accounts for the years 1986
and 1987; and other information. Lawrence did not comply with
Agent Red's request for the missing bank statements and list of
bank accounts.
Because of the relationship between Lawrence and Abraham,
Agent Red was assigned the examination of the Abrahams' 1987
Federal income tax return. On July 23, 1990, Agent Red mailed an
initial appointment letter to the Abrahams along with an IDR
requesting among other things certain books and records relating
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