William Ivan Doty and Sandra Ann Doty - Page 5

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          the distributions of the five surrendered life insurance                    
          policies.                                                                   
               On April 25, 2001, Northwestern sent petitioner a letter               
          which generally explained the calculation of the taxable portion            
          of petitioners’ surrendered life insurance policies.                        
          Northwestern also provided petitioner a Surrender of Policy                 
          Statement which detailed the policy value and the net proceeds              
          with respect to each surrendered life insurance policy.                     
               On June 29, 2001, Northwestern sent a letter to petitioner             
          which further explained the calculation of the taxable portion of           
          the surrendered life insurance policies.                                    
               On October 2, 2002, in a sworn affidavit, Linda A. Schaefer            
          (Ms. Schaefer), Northwestern’s Director of the Policyowners                 
          Department, set forth the total policy cash value, the net cost,            
          and the net taxable gain with respect to each of petitioners’               
          five surrendered life insurance policies.  Ms. Schaefer’s                   
          statement also explained in detail how each of these amounts was            
          computed.  In a second sworn affidavit bearing the same date, Ms.           
          Schaefer provided a detailed history of the premiums paid and the           
          loans made with respect to petitioners’ surrendered life                    
          insurance policies.                                                         
               Petitioner testified that he received annual statements from           
          Northwestern with respect to the surrendered life insurance                 
          policies which detailed premium and loan payments.  Petitioner              






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