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Petitioners submitted a written protest in response to
respondent’s 30-day letter. Thereafter, petitioners and
respondent were unable to resolve the issues set forth in
respondent’s 30-day letter. By letter dated November 2, 2000,
respondent determined a deficiency in petitioners’ 1996 income
tax liability of $36,048 and an accuracy-related penalty under
section 6662 (for negligence or disregard of rules or
regulations) of $7,209.60.5
On January 16, 2001, petitioners filed their petition
assigning error to respondent’s determinations.6 On March 19,
2001, respondent filed his answer denying that he had erred. The
case was set for trial at the Court’s trial session commencing on
December 3, 2001, in Houston, Texas. Prior to that date,
respondent communicated to petitioners his intent to concede the
case. When the case was called from the trial calendar, the
parties filed a Stipulation of Settled Issues, pursuant to which
(1) respondent conceded the proposed income tax deficiency and
penalty, and (2) petitioners reserved their right to file a
motion for costs under section 7430.
5 The small differences between the deficiency and penalty
figures in the 30-day letter as compared to those in the notice
of deficiency appear to be due to the correction of mathematical
errors.
6 Petitioners resided in San Antonio, Tex., when they filed
their petition in this case.
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