Larry J. and Patricia A. Sumrall - Page 7




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          defense to a criminal charge.  As part of his investigation,                
          Revenue Agent Raven did not concern himself with petitioner’s tax           
          liability for 1992, since, as of the start of the criminal                  
          investigation, no return for 1992 had yet become due.                       
               During his investigation, Special Agent Raven interviewed              
          Mr. Barker on one or more occasions, accompanied on at least one            
          occasion by Mr. Stufflebeam.  During the course of those                    
          interviews, there was no discussion of NOLs.                                
               By letter dated February 14, 1996 (the February 14 letter),            
          Mr. Barker provided certain information to Donald C. Hill,                  
          criminal tax counsel for petitioner.  Shortly after he received             
          the February 14 letter, Mr. Hill provided a copy to the U.S.                
          Attorney and employees of the IRS.  The February 14 letter                  
          contains no claim for any refund, overpayment, or NOL carryback.            
          It does state:  “We may have some timing errors [in, according to           
          petitioner, “the returns for 1988 through 1990"] yet the tax                
          returns should be materially correct”.                                      
               As a result of his investigation, Special Agent Raven                  
          recommended the prosecution of petitioner for crimes connected              
          with his 1988, 1989, and 1990 income tax liabilities.  On                   
          November 6, 1995, petitioner signed a plea agreement, agreeing to           
          plead guilty to one count of willfully failing to file an income            
          tax return for 1988, in violation of section 7203.  Judgment was            
          entered on March 12, 1996.                                                  






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