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letter, and informed Mr. Gardner that respondent wished to submit
a decision document to the Court reflecting a zero deficiency, in
lieu of filing an answer. Mr. Gardner responded by stating that
he intended to file a motion for administrative and litigation
costs.
On January 19, 2000, respondent filed an answer to the
petition. In the answer, respondent conceded that there was no
deficiency in income tax due from petitioner for the taxable year
1998. Respondent attached a copy of the no-change letter as an
exhibit to the answer.
Also on January 19, 2000, district counsel sent Mr. Gardner
a letter enclosing a form of decision and stipulation (the form
of decision) reflecting no deficiency in, and no overpayment of,
petitioner’s income tax for 1998. The form of decision included
a stipulation that petitioner is not entitled to attorney’s fees
under section 7430. That same day, district counsel received a
letter from Mr. Gardner stating, in part, as follows:
This letter concerns your message that you are in the
process of preparing decision documents reflecting no
tax deficiency is due.
We are delighted that this case can be expeditiously
resolved on the merits. Based upon you message it
appears that the notice of deficiency should have never
been mailed to the taxpayer. Or if the Service
subsequently changed its position on this case, it did
not legally withdraw the notice of deficiency by
executing the proper forms. In either case, the
taxpayer incurred unnecessary legal expenses and costs
related to the defense of the deficiency notice in the
amount of $1,022.50 for which she should be compensated.
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