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(Federal agents may be sued in their individual capacity),1 and
possible recovery under section 7433, which provides for civil
damages for certain unauthorized collection actions.
C. Notice of Deficiency
Respondent concluded that petitioner did not comply with
respondent's requests to provide information about what happened
to the �570,000. Respondent also concluded that the �570,000
settlement did not appear on the books and records of A.T.O.
Respondent also concluded that petitioner directed Maxwell
Glasner & Co. to deposit the �570,000 in a Swiss bank.
On September 8, 1995, respondent mailed a notice of
deficiency to petitioner in which respondent determined that
petitioner was liable for a deficiency in income tax of $369,390
for 1987 and additions to tax of $92,348 under section 6651(a)(1)
and $92,348 under section 6661. In the notice of deficiency,
respondent determined that the settlement proceeds of $965,425
were income to petitioner. Respondent explained that
determination as follows:
It is determined that you received $965,425.00
(which is the dollar equivalent of 570,000 pounds
sterling on May 7, 1987) on May 7, 1987, which amount
was not reported on your return filed for the taxable
year 1987. This amount represents cash proceeds from
1 The plaintiff in Bivens v. Six Unknown Named Agents, 403
U.S. 388 (1971), complained that an agent of the Federal Bureau
of Narcotics, acting under a claim of authority, entered the
plaintiff's apartment and arrested him for alleged narcotics
violations. The Court found that the search was unlawful and
unreasonable.
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