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In May 1988, respondent notified petitioner that the correct
amount of the overpayment was $3,721.66. This notice further
stated that respondent was considering petitioner’s claim for an
overpayment, but that the period of limitations might have
expired. In October 1989, respondent applied a portion of the
1982 overpayment as follows: $1,300.34 to petitioner’s
outstanding 1981 tax liability and $1,421.07 to petitioner’s
outstanding 1980 tax liability. In November 1989, respondent
issued but immediately canceled a refund check to petitioner in
the amount of $1,160.52. This amount reflects the $1,000.25
which was remaining from the 1982 overpayment, as well as $160.27
of accrued interest. Petitioner never received this check.
In the meantime, Golden Gate Associates, an entity related
to Neptune Associates, had been under examination by respondent
and had been involved in litigation before this Court. Golden
Gate Associates agreed to a stipulated decision which was entered
by this Court on August 20, 1996. On June 30, 1997, as a result
of the stipulated decision, petitioner was assessed, as a
computational adjustment, an additional tax liability of $4,210
for 1982, plus $17,166 in accrued interest.
Petitioner requested that respondent abate the interest with
respect to his 1982 taxable year. The explanation for his claim
was as follows:
This claim for refund of interest is being filed as the
result of a 1982 tax shelter recently concluded. A 1982
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