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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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