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When the case had been assigned to Ward, her manager
instructed her to secure extensions of the limitations periods
and, if she could not do so, then she was to “write-up and
disallow issues and send to 90-Day.”
In the notice of deficiency respondent disallowed about 75
percent of petitioners’ claimed 1991 deductions, and then settled
by conceding about 97 percent of the disallowance. Supra table
1.
In the notice of deficiency respondent disallowed about 92
percent of petitioners’ claimed 1992 deductions, and then settled
by conceding about 91 percent of the disallowance. Supra table
2.
In the footnotes in the quoted excerpts from respondent’s
brief, supra, respondent recognizes the concerns about the
statute of limitations that led to our Court-reviewed opinion in
Minahan v. Commissioner, 88 T.C. at 501-508 (1987), and to the
congressional determination to embody those concerns in the last
sentence of section 7430(b)(1). Yet, the record makes it plain
that Ward was instructed to get an extension of the limitations
period or to prepare a report disallowing deductions, leading to
a notice of deficiency. That is exactly what Ward did. Even
though petitioners’ representative had claimed to have the
substantiating documentation, Ward did not ask to see it. Ward
prepared an IDR, but did not give the IDR to petitioners’
representative until the day before respondent issued the notice
of deficiency, and then only when prompted by petitioners’
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