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and accuracy-related penalties of $40,165 rather than the $97,483
shown in the notice of deficiency. Petitioners, by letter,
declined to accept the settlement proposal and explained that,
while they agreed with some of respondent’s adjustments, they
still did not agree with many of the proposed adjustments.
The Appeals Office then advised petitioners that the case
could not be settled and was being forwarded to respondent’s
counsel for trial preparation. Because petitioners had not
signed the proposed fact stipulations and had not responded to
the request for documents, counsel for respondent filed a motion
and obtained an order that compelled petitioners to produce the
requested documents and show cause why the proposed stipulations
should not be accepted. Petitioners thereafter filed a motion
for continuance, which was granted. Petitioners then employed an
attorney who entered the case, and, over the next few months, the
parties could not agree on settlement. The case was again
calendared for trial on December 4, 1995, and, on that date, a
basis for settlement was reached. A decision entered on December
20, 1995, provided that petitioners were liable for income tax
deficiencies of $10,599 and $9,851 and penalties under section
6662(a) of $2,119.60 and $1,970.20, respectively, for 1989 and
1990. The decision was entered on December 20, 1995.
Petitioners thereafter filed claims for abatement of interest on
the deficiencies for both years, commencing from the date they
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