Taylor Miller - Page 14




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          to the proposal in respondent’s 30-day letter of September 28,              
          1995.                                                                       
               Before turning to petitioner’s three arguments that                    
          respondent’s statutory notice is invalid, we recite some events             
          in the administrative history of the case noted by the parties in           
          making their arguments.                                                     
               Before mailing the 30-day letter of September 28, 1995, in             
          which respondent first proposed, after mailing petitioner the no            
          change letter, that the State Farm class action lawsuit                     
          settlement proceeds should be included in her gross income,                 
          respondent issued a 30-day letter, on March 29, 1995, to the                
          effect that she had failed to include $2,894 of bartering                   
          proceeds in her 1992 return.  Petitioner’s representative                   
          resolved that issue simply by sending respondent a copy of the              
          Schedule D on which the bartering proceeds were reported.                   
          Petitioner now claims that respondent’s raising of the bartering            
          proceeds issue was a prohibited second examination without                  
          petitioner’s consent in violation of section 7605(b).                       
               On July 17, 1996, after the 30-day letter of September 28,             
          1995, and the parties’ execution of the first consent extending             
          the period of limitations, a tax technician in respondent’s                 
          District Director’s Office mailed petitioner’s attorney a letter            
          that on balance was more unfavorable to petitioner than the 30-             
          day letter:  Although the new letter said the recovery was not              





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