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1985 claiming a refund of only $36,408.4
Examination
On January 3, 1992, respondent advised petitioners that
their 1988 amended return and, by implication, their refund claim
for 19855 were being reviewed by Examiner Monte Kruse. Examiner
Kruse issued various information document requests (IDR's) to
petitioners, received the relevant information, and evaluated
several tax issues. On August 1, 1992, Examiner Kruse issued a
30-day letter proposing a deficiency for the 1988 tax year with
regard to various issues. In the 30-day letter, Examiner Kruse
stated that petitioners’ claim for additional losses had been
considered; however, he allowed only $3,090 of those losses.
Because Examiner Kruse proposed additional income items, the
allowed loss did not create a refund or generate net operating
losses to be carried back to 1985.
Appeals
On August 26, 1992, petitioners verbally requested that
respondent’s Appeals Office (Appeals) review the 1988 tax year.
On September 8, 1992, Examiner Kruse prepared a Special Handling
Notice to forward petitioners’ materials to Appeals. On
4 On the September 5, 1991, Form 1040X, petitioners reduced
the net operating loss carryback (from 1988) to $190,000. This
amendment created a smaller refund request.
5 References to the refund claim for 1985 are to both the
August 11, 1990, Form 1040X and the September 5, 1991, Form
1040X.
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