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A few weeks later when I dropped off the completed tax
return he said he was concerned that the IRS would
wonder where he got the money to pay Linda. He wanted
me to attach a note to his tax return telling the IRS
that the money paid to Linda was not taxable. I told
Terry that I could not write a meaningful letter to the
IRS about the auto sales. I did not know the cars
sold, date of sale, who the buyers and sellers were,
social security numbers. I suggested he write the
letter himself or else have the Lawyer handling the
sale write a letter for him.
Petitioner's 1988 return as filed contained no attachments or
other references to any automobile sales or loans used to pay
amounts due to Linda pursuant to the divorce.
Additional Facts
Although the exact date on which respondent began her civil
examination of petitioner's 1988 Federal income tax return is
unknown, the investigation appears to have been underway by the
beginning of 1990. From approximately May 1990 to September
1991, respondent also conducted a criminal investigation of
petitioner's 1988 Federal income tax return. The investigation
did not result in a recommendation of criminal prosecution.
On February 16, 1993, petitioner executed a Form 8728
extending the period of limitations for assessment of
petitioner's 1988 income tax to June 30, 1994. In July or August
8Petitioner executed a total of three Forms 872 in this
case. On Feb. 12, 1992, petitioner executed his first Form 872,
which extended the period of limitations to June 30, 1993. In
addition, on June 9, 1994, petitioner executed his third Form
872, extending the period of limitations to Aug. 31, 1994.
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