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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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