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that year. On the record before us, we conclude that respondent
improperly assessed the tax shown in that substitute for return
and proposed in that 30-day letter. On that record, we further
conclude that respondent abused respondent’s discretion in
determining to proceed with the collection action as determined
in the notice of determination regarding respondent’s assessed
amounts with respect to petitioner’s taxable year 1994.
We now address petitioner’s taxable years 1995 and 1996.
The record establishes that respondent did not issue a notice of
deficiency with respect to 1995 or 1996 (except for the notice of
deficiency for 1996 and 1997 discussed above). However, respon-
dent accepted and processed as filed the return that petitioner
mailed on or about May 24, 1999, to respondent for each of his
taxable years 1995 and 1996, in which he showed total tax of
$3,566 and $4,024, respectively, and total tax owed of $3,214 and
$3,842, respectively. Moreover, respondent assessed such respec-
tive total tax reported in petitioner’s 1995 filed return and
petitioner’s 1996 filed return. Finally, although petitioner did
not receive a notice of deficiency with respect to petitioner’s
unpaid liability for 1995 or 1996, the Court finds the conten-
tions and arguments which petitioner advanced at his Appeals
Office hearing, in his petition, and in petitioner’s trial
memorandum and which challenge the existence or the amount of
each such unpaid liability to be frivolous and/or groundless.
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