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(b)(2), Proced. & Admin. Regs. (Emphasis supplied.) At the time
of the Appeals conference, petitioners were not aware of the
insurance company’s intent in making the settlement payment.
That information was discovered from third-party sources shortly
before trial and almost 1 year after the Appeals conference.
The regulation requires disclosure of relevant information
“to the extent such information and its relevance were known or
should have been known to the party or qualified representative
at the time of such conference.” Id. In the context of the
settlement conference with Appeals, that requirement was met by
petitioners, who made a reasonable and good faith effort to
provide the Appeals officer with relevant facts and law in the
context and development of the case at the time of the
conference.
In addition, under respondent’s view, taxpayers might be
required to seek out every possible piece of relevant evidence
and/or to postulate every plausible theory in order to exhaust
administrative remedies and to recover administrative or
litigation costs. Respondent’s approach also disregards the
relative cost of developing all relevant information that is
known or should have been known. Under respondent’s approach to
the regulation, few, if any, taxpayers might be able to present
all relevant evidence that could have been developed.
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