- 13 -- 13 -
Petitioners concede that they received the 30-day letter.
The 30-day letter served upon petitioners specifically stated the
basis for respondent's adjustment and clearly requested a
response from petitioners and supporting documentation.
Petitioners did not respond to the 30-day letter. Indeed,
petitioners' first contact with respondent concerning this matter
came through their counsel after the petition in this case was
filed.9 Approximately 1 year after respondent first requested
information from petitioners, respondent received information
from American Express establishing that petitioners had not
underreported their income in the amount originally indicated.
Significantly, respondent received this information only after
respondent directly contacted the third party payor. Over a 5-
month period, respondent's Appeals Officer contacted petitioners'
counsel in repeated attempts to resolve this matter. Respondent
notified petitioners' counsel on January 16, 1998, that
respondent was conceding all but $12,000 of the disputed amount,
and stated that respondent was prepared to concede the remainder
if petitioners proffered the necessary documentation. Despite
repeated statements, petitioners' counsel failed to follow up
with the Appeals Officer.
9 In their motion, petitioners argue that their accountant
responded to the 30-day letter by sending documentation to the
Internal Revenue Service Center in Chamblee, Georgia, to support
their position that the amount reported on the Form 1099-R by
American Express was a nontaxable rollover from an IRA. This
assertion is unsupported by the record.
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