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Respondent, through his District Director, commenced an
audit of petitioners’ 1994 and 1995 taxable years about June
1997. In connection therewith, the District Director requested
certain information; petitioners ultimately provided some, but
not all, of this information to the District Director. The
District Director concluded the audit on July 2, 1998, proposing
certain upward adjustments to petitioners’ income. On that date,
the District Director also mailed to petitioners two 30-day
letters (one for 1994 and one for 1995) listing proposed upward
adjustments of $5,675 and $12,493 to the respective years’
income. The 30-day letter invited petitioners to request an
administrative appeals conference to discuss these proposed
adjustments, providing: “IF YOU * * * wish a conference with the
Regional Office of Appeals [Appeals], YOU MUST LET US KNOW within
30 days.” The 30-day letter explained the procedures for
requesting a conference with Appeals.
Petitioners never requested a conference with Appeals for
either year. Nor did they ever deliver to respondent a written
protest as to the District Director’s conclusions set forth in
the 30-day letters.
On March 19, 1999, respondent issued the notices of
deficiency to petitioners. As to 1994, respondent determined
that petitioners were liable for a $5,383 deficiency and a
$1,070.60 accuracy-related penalty under section 6662(a). As to
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Last modified: May 25, 2011