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income of $835,768. The proposed adjustments were explained on
Form 886-A, Explanation of Items, included by respondent in the
30-day letter.
Petitioner filed a protest on December 5, 1997 and requested
that the case be referred to respondent's Appeals Office for a
hearing. On April 16, 1998, the Appeals officer sent a letter to
petitioner's counsel stating that the case had been received for
consideration and that a conference would be scheduled.
On May 18, 1998, the Appeals Office sent a letter and Form
872, Consent to Extend the Time to Assess Tax, to petitioner's
counsel requesting an extension of the statute of limitations for
the assessment of tax for the 1994 tax year.
The Appeals officer received no reply to the letter
requesting an extension of the statute of limitations nor to his
attempts to contact petitioner's counsel by phone. Since
petitioner would not extend the statute of limitations, the
Appeals officer concluded that a notice of deficiency should be
issued and that the notice of deficiency should not deviate from
the 30-day letter. A notice of deficiency was duly issued by
respondent on August 18, 1998.
In the notice of deficiency, respondent determined a
deficiency of $311,604 in petitioner's 1994 Federal income tax
and an addition to tax pursuant to section 6662 in the amount of
$62,321.
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