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with his return. Transcripts1 of petitioner’s account for 1996
show that, on August 11, 1997, respondent assessed a tax
liability of $12,245, gave a credit for the $2,726 of withheld
taxes, assessed an addition to tax for failure to pay of $190,
and assessed interest of $281. The total assessment of $9,990
was listed as the “Assessed Balance” for 1996 in the notice of
levy covering that year.
In a notice of proposed changes (Form CP 2000) dated March
11, 1998, (the CP 2000 letter), respondent’s Philadelphia Service
Center advised petitioner of proposed changes to petitioner’s
1996 return that would result in additional tax, penalty, and
interest due in the sum of $11,482. The proposed changes
consisted of (1) a $24,912 net increase in taxable income:
$25,496 of “nonemployee compensation” reported on Form 1099-MISC,
Miscellaneous Income, ($25,336 reported by Nationwide Life
Insurance Co. (Nationwide) and $160 by Ford Motor Credit) less a
$584 deduction for 50 percent of a proposed self-employment tax,
(2) self-employment tax, (3) an accuracy related penalty, and (4)
interest from April 15, 1997 to March 26, 1998.
1 Each of the transcripts in evidence is derived from
current account information in respondent’s master file. In
general, transcripts are obtained by entering various command
codes (e.g., MFTRA, TXMODA) into respondent’s integrated data
retrieval system (IDRS) in order to obtain a particular
transcript. IDRS is essentially the interface between
respondent’s employees and respondent’s various computer systems.
See Crow v. Commissioner, T.C. Memo. 2002-149 n.6.
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