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merely reviewed Schedule D of petitioner’s 1992 income tax return
and the letter from petitioner’s representative. Respondent’s
review of a taxpayer’s income tax return and accompanying
schedules does not constitute a second inspection of the
taxpayer’s books of account under section 7605(b). See Curtis v.
Commissioner, 84 T.C. 1349, 1351 (1985); Pleasanton Gravel Co. v.
Commissioner, 64 T.C. 510, 528 (1975), affd. per curiam 578 F.2d
827 (9th Cir. 1978). Since there was no second inspection or
examination, respondent’s inquiry, following the no change
letter, into the bartering proceeds issue without a prior written
justification did not violate section 7605(b). See Digby v.
Commissioner, 103 T.C. 441, 451 (1994).
Even if respondent should be deemed to have performed a
second inspection in raising the bartering proceeds issue, it was
done with the knowledge of petitioner, who raised no objection
thereto prior to the morning of trial. Consequently, petitioner
waived the requirement of written notice prior to a second
inspection. See Rife v. Commissioner, 41 T.C. 732, 747 (1964),
affd. on this issue 356 F.2d 883 (5th Cir. 1966); Rice v.
Commissioner, T.C. Memo. 1994-204.
Moreover, even if respondent should be deemed to have
performed a second inspection on the bartering proceeds issue
without prior notification that petitioner did not waive,
invalidation of the notice of deficiency would not be the proper
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