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leading respondent to issue a notice of deficiency for the year
1985. The 1985 deficiency was assessed on February 22, 1988.
After receiving the bill for the assessment, petitioner retained
an Enrolled Agent, Carol Baptista, who requested that respondent
grant audit reconsideration. Ms. Baptista discovered that
petitioner had not filed income tax returns for 1986 and 1987 and
explained to petitioner that he was legally required to file such
returns. On March 24, 1989, Ms. Baptista wrote a letter to the
District Director, Internal Revenue Service, Honolulu, Hawaii
regarding the “Tax Audit and Filing Position of John Marsh.”
That letter was signed by Ms. Baptista and petitioner and stated:
Re: Tax Audit and Filing Position of John Marsh
Gentlemen:
This letter is to clarify the compliance and
filing position of Mr. John Marsh.
As you are aware, the Internal Revenue Service
audited Mr. Marsh for the year 1985. Mr. Marsh was
represented by Mike Kailing, who was then, apparently,
an enrolled agent. Mr. Marsh is, obviously, not a tax
expert, and did not realize that some of Mr. Kailing’s
positions were, to say the least inappropriate. Mr.
Kailing apparently refused to comply with Internal
Revenue Service requests, giving rise to a substantial
assessment against Mr. Marsh.
Mr. Marsh is now, however, represented by Janell
Israel & Associates, and complete information has been
presented to support the 1985 return. However, on
audit reconsideration, it appears to us that all of the
supporting material presented was not taken into
consideration, and we cannot get the Internal Revenue
Service to provide us with the final report explaining
why such a substantial assessment remains. We would
like an opportunity to discuss what portions of the
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