- 14 -- 14 -
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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