Phillip Lee Allen and Carolyn F. Allen - Page 22




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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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