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At the bottom of the letter, under the heading "Reason for
Disallowance", the following sentence was hand-written: "To the
extent verified, the expenses are allowable as start-up costs and
must be capitalized."
The IRS letter dated November 21, 1996, was mailed to
petitioners in an envelope bearing a postmark date of November
27, 1996.
The IRS letter dated November 21, 1996, was mailed to
petitioners approximately 2 weeks after the 90th day after the
notice of deficiency was sent to petitioners.4 In other words,
when petitioners received the IRS letter dated November 21, 1996,
and, indeed, on the date on which such letter was generated, the
90-day period within which petitioners could have filed a
petition in respect of the notice of deficiency had expired.
Because petitioners believed that the notice of deficiency
had been rescinded, they regarded the IRS letter dated November
21, 1996, as a second notice of deficiency. In view of the fact
that further consideration of their 1993 income tax return had
not led to an administrative resolution of their case,
petitioners then filed a petition with this Court. Such petition
was mailed to the Court on February 20, 1997, and was filed by
the Court on February 24, 1997. The latter two days; i.e.,
4 The 90th day after the notice of deficiency was sent to
petitioners was Tues., Nov. 12, 1996.
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