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respondent’s letter of February 10, 1999. Petitioner’s conduct
constituted refusal to cooperate with respondent’s examination.
On April 24, 1999, respondent issued a formal summons for
petitioner’s records. On June 3, 1999, petitioner sent a letter
to respondent making frivolous tax protester arguments by citing
portions of statutes and court decisions entirely out of context
and demanding that respondent answer a new set of frivolous
questions. Petitioner signed his letter “Without prejudice UCC
10207”. The letter evidences petitioner’s continued refusal to
cooperate with respondent’s examination.
On June 12, 1999, petitioner and his counsel attended a
meeting with respondent’s examining agents. Again, petitioner
did not produce records in response to the summons and continued
to make frivolous demands.
Because petitioner did not produce records to support his
return positions, respondent elected to use an indirect method
(the bank deposits method) to determine petitioner’s tax
liability. On March 31, 2000, respondent issued a notice of
deficiency to petitioner. Respondent did not send a preliminary
30-day letter before issuing the notice of deficiency. The
period of limitations for making an assessment of petitioner’s
1996 tax liability would have otherwise expired on April 15,
2000.
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