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This case is before the Court on respondent's Motion to
Dismiss for Lack of Jurisdiction, filed pursuant to Rule 53.
Respondent contends that dismissal is warranted on the ground
that the petition was not filed within the time prescribed by
sections 6213(a) and 7502. In contrast, petitioners contend
principally that the notice of deficiency was rescinded and that
dismissal is warranted for that reason; alternatively,
petitioners contend that a subsequent Internal Revenue Service
(IRS) letter constitutes a second notice of deficiency and that
the petition was timely filed in respect of such letter.
Background
At the time that the petition was filed with the Court,
petitioners resided in Mesa, Arizona.
On August 14, 1996, respondent mailed a notice of deficiency
(the notice of deficiency) to petitioners. In the notice,
respondent determined a deficiency in petitioners' Federal income
tax for the taxable year 1993 in the amount of $10,002.2 The
deficiency was attributable principally to the disallowance of
Schedule C deductions. In explanation of the disallowance, the
notice stated that the expenses in question represented startup
expenses that must be capitalized.
2 In the petition for redetermination that petitioners
ultimately filed, petitioners placed only $8,115 of the
determined deficiency in dispute. At the hearing on respondent's
motion, petitioners confirmed that they intended to contest only
$8,115 of the determined deficiency.
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