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* [be treated as] an S corporation loss and 50% [as] a C
corporation loss". This proposal was apparently rejected by the
Dugans. By letter dated October 18, 1995, Ms. Loy notified Mr.
Crabtree that she was "not successful in securing a copy of the
original form 2553 from the Service Center" and that the case was
being forwarded to counsel for trial preparation.
At a conference held on February 12, 1996, Mr. Kiessling,
the District Counsel attorney to whom the case was assigned,
informed Mr. Crabtree that he had been unable to obtain
verification that a Form 2553 had been filed by NTI prior to
September 1992.
On February 13, 1996, Mr. Crabtree sent a letter (by mail
and facsimile) to Mr. Kiessling attaching a copy of NTI's Form
2553 which bore a date stamp indicating receipt on March 18,
1991, and a copy of respondent's April 9, 1991, letter to NTI
questioning the taxable year for which the election was
applicable. These documents were apparently discovered by Mr.
Crabtree while examining additional files forwarded to him by
petitioner or Mrs. Dugan. These documents had not previously
been provided by the Dugans or Mr. Crabtree to respondent during
any stage of the controversy. On February 15, 1996, Mr.
Kiessling advised Mr. Crabtree that respondent would concede the
case.
On March 11, 1996, the parties filed the above-described
stipulation of settled issues. Thereafter, petitioner and Mrs.
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