Simpson Financial Services, Inc. - Page 11

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               Shortly after respondent answered petitioners' petitions,              
          she transferred the cases to Appeals.  The Appeals officer met              
          with petitioners' counsel in an effort to settle these cases.               
          The Appeals officer reviewed petitioners' documentation for their           
          claimed deductions and other items and requested additional                 
          substantiation from petitioners in order to determine their                 
          correct tax liability.  Respondent, through her Appeals officer,            
          made changes to her positions and offered settlements regarding             
          those changes based on the documentation petitioners furnished at           
          the Appeals conference; however, the parties could not then reach           
          a mutually acceptable settlement.  After these cases were                   
          transferred back to District Counsel, respondent's counsel                  
          requested additional documentation through informal discovery.              
          Upon review of this additional documentation and a conference               
          between the parties, respondent was able to settle these cases              
          shortly over 1 year after issuing her notices of deficiency and             
          within 11 months of answering petitioners' petition.                        
               Petitioners argue that respondent did not have a reasonable            
          basis in either fact or law primarily because her revenue agent             
          "employed poor audit procedures, made substantial erroneous                 
          conclusions of fact and law, made arbitrary adjustments and                 
          concocted corruptions of fact and law."  Petitioners also argue             
          that respondent's agents did not contact petitioners at various             
          times during the review of their audit or during the interval               
          between the issuance of the revised RAR on June 28, 1993, and the           




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