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There is no statutory basis for a no-change letter, cf. sec.
7121 (authorizing closing agreements that are generally final and
conclusive), and we are aware of no case holding that a no-change
letter is binding on the Commissioner. Under the circumstances,
we think it was appropriate for petitioner to protect herself
from the possibility that the no-change letter might not have
represented respondent’s final position, e.g., that the no-change
letter might have been issued before internal review was
completed.7 The commencement of an action in this Court offered
such protection.
Respondent contends that petitioner had a duty to mitigate
costs and that she should have requested that the notice of
deficiency be rescinded. See sec. 6212(d); Hanashiro v.
Commissioner, T.C. Memo. 1999-78; Powell v. Commissioner, T.C.
Memo. 1998-108; see also Hesse v. Commissioner, T.C. Memo. 1997-
6(...continued)
Court, we would appreciate it if you would sign and
return the enclosed waiver form. This will permit us
to assess the deficiency quickly and will limit the
accumulation of interest. The enclosed envelope is for
your convenience. If you decide not to sign and return
the statement and you do not timely petition the Tax
Court, the law requires us to assess and bill you for
the deficiency after 90 days from the above mailing
date of this letter (150 if this letter is addressed to
you outside the United States). [Emphasis added.]
7 We note that the notice of deficiency was issued by the
director of respondent’s Atlanta Service Center, whereas the no-
change letter was issued by one of the director’s subordinates.
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