James Triplett - Page 8

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          adjustments, and determined additions to tax.  Respondent was               
          entitled to use any reasonable method to determine petitioner's             
          income.  Petzoldt v. Commissioner, 92 T.C. 661, 693 (1989);                 
          Michas v. Commissioner, T.C. Memo. 1992-161.  Accordingly, we               
          find that respondent's administrative position was substantially            
          justified.                                                                  
               We now turn to the proceedings before this Court.  On                  
          March 3, 1997, petitioner filed his amended petition.  Petitioner           
          did not raise the period of limitations issue until he filed his            
          amended petition, more than 5 months after respondent issued the            
          notice of deficiency.  If petitioner were deemed to have filed a            
          return in 1985, the period of limitations would have run.  See              
          sec. 6501.                                                                  
               Section 7430(b)(1) provides in pertinent part that:  "A                
          judgment for reasonable litigation costs shall not be awarded               
          * * * in any court proceeding unless the court determines that              
          the prevailing party has exhausted the administrative remedies              
          available to such party within the Internal Revenue Service."  To           
          meet this requirement, a party must disclose to the Appeals                 
          Office "all relevant information regarding the party's tax matter           
          to the extent such information and its relevance were known or              
          should have been known to the party" at the time of the                     
          conference.  Sec. 301.7430-1(b)(2), Proced. & Admin. Regs.  As              
          set forth above, petitioner failed to discuss his tax issues and            





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