James L. and Eva J. Downs - Page 7




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               In a letter dated October 9, 1999, from James Elliott, Chief           
          of Appeals, to Congressman Packard, Mr. Elliott states:                     
               Our records show that * * * [petitioners] were mailed a                
               certified notice of the partnership audit on July 14, 1986.            
               * * * [Petitioners] were also mailed certified notices of              
               final partnership adjustments on April 9, 1990.  These                 
               notices were mailed to them at 24672 Jeremian Drive, Dana              
               Point, California.  (We realize that the address on the 1986           
               and 1990 letters [varies] slightly from * * * [petitioners’]           
               address at 24672 Jeremiah.)                                            
          He furthers states that the other partners were also issued                 
          notices, that the tax matters partner filed a petition with the             
          Tax Court, and that “On June 29, 1990, our office also sent a               
          letter to the taxpayers offering a settlement of the government             
          conceding the penalties if the taxpayer conceded the tax.  In               
          TEFRA cases, the tax matters partner has the responsibility to              
          keep all partners informed of the progress of the case.”                    
               The record does not reflect when respondent was advised of             
          petitioners’ Jeremiah Drive address nor, except for petitioner’s            
          self-serving testimony, whether the FPAA was returned to                    
          respondent as undeliverable.                                                
               Once partnership level proceedings are completed, the                  
          Commissioner is permitted to assess a computational adjustment              
          against a partner without issuing a deficiency notice.  See sec.            
          6230(a)(1); N.C.F. Energy Partners v. Commissioner, 89 T.C. 741,            
          744 (1987).  This must have occurred sometime between the date              
          the opinion for Utah Jojoba I Research v. Commissioner, supra,              
          was filed (January 5, 1998) and the date the instant notice of              





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