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On December 9, 1999, respondent spoke with petitioner about
the documentation. Petitioner acknowledged that the transaction
was probably his, but he wanted to review his records.
Respondent faxed all the documents to petitioner.
On January 3, 2000, respondent spoke to petitioner, who
agreed to the additional income provided his basis was taken into
account for computation of taxable gain. Respondent asked
petitioner to provide records to substantiate his basis in the
note. Petitioner sent substantiation of the basis to respondent.
Among other things, petitioner's records indicated that the
account was with Dean Witter. Apparently, the revised capital
gain income, taking into account petitioner’s basis, did not
result in a deficiency after subtracting the standard deduction
and the exemption amount. At the call of this case from the
trial calendar on January 31, 2000, respondent reported as a
basis of settlement that petitioner did not have a deficiency in
income tax for 1996 and was not liable for any additions to tax.
The Court entered a decision accordingly.
Respondent contends that respondent's position was
substantially justified and states that if petitioner had been
forthcoming with the documentation in response to the 30-day
letter, then this proceeding in this Court would have been
unnecessary. We agree with respondent.
Whenever there is a factual determination, respondent is not
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