Joseph F. and Camille T. Uddo - Page 14

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                              This conduct places petitioners squarely in the position of                                                                                  
                    the taxpayer in McDaniel v. Commissioner, T.C. Memo. 1993-148.                                                                                         
                    In McDaniel, respondent sent a letter to the taxpayer (Tax Notice                                                                                      
                    CP-2501) requesting an explanation as to why information reported                                                                                      
                    on the taxpayer's return did not match information provided by                                                                                         
                    third party payors.  After the taxpayer failed to respond to the                                                                                       
                    letter, respondent issued a notice of deficiency.  Six months                                                                                          
                    after the petition was filed, the taxpayer provided information                                                                                        
                    that enabled respondent to concede that there was no deficiency.                                                                                       
                    In denying the taxpayer's motion for administrative and                                                                                                
                    litigation costs this Court stated                                                                                                                     
                                        Although respondent ultimately conceded each of the                                                                                
                              issues raised in the notice of deficiency, she was not able                                                                                  
                              to do so without the information from petitioner.  A request                                                                                 
                              for such information was made before the statutory notice of                                                                                 
                              deficiency was issued.  Any delay in this case was caused by                                                                                 
                              petitioner and petitioner's counsel.  Had petitioner acted                                                                                   
                              promptly, this matter could have been resolved shortly after                                                                                 
                              petitioner received the Tax Notice CP-2501 * * *.  We find                                                                                   
                              that respondent's position was not unreasonable * * *                                                                                        
                              [McDaniel v. Commissioner, supra; emphasis added.]                                                                                           
                    In short, just as in McDaniel v. Commissioner, supra, any delay                                                                                        
                    in resolution of this case was caused by petitioners and their                                                                                         
                    counsel.  If petitioners had responded to the 30-day letter, this                                                                                      
                    matter could have been resolved prior to the issuance of the                                                                                           
                    notice of deficiency.                                                                                                                                  
                              We conclude that respondent had a reasonable basis in fact                                                                                   
                    and in law for the issuance of the notice of deficiency.                                                                                               







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