Frank Chen - Page 4

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          by the purchase of securities within a month.  To assist him in             
          deciding which securities to invest or trade in, petitioner used            
          software that enabled him to receive up-to-date information such            
          as “Level II NASDAQ quotations” and Dow Jones “real time” data.             
               For all of 1999, petitioner resided in San Jose, California,           
          and was employed, full time, by MediaQ, Inc. as a computer chip             
          engineer.  He received wages of $74,699 from his employer in                
          1999.                                                                       
          Petitioner’s Purported Election Under Section 475(f)                        
               Petitioner did not timely file a Federal income tax return             
          for 1999.  After receipt of the notice, petitioner timely filed             
          an “imperfect” petition3 on January 22, 2003, which was later               
          perfected by the filing of an amended petition on March 14, 2003.           
          Attached to the amended petition is a copy of a Form 1040, U.S.             
          Individual Income Tax Return, for 1999 together with various                
          documents attached to that return, including copies of (1) a                
          purported retroactive election, under section 475(f) (dated March           
          9, 2003, to be effective January 1, 1999), of the mark-to-market            
          method of accounting for traders in securities (the election),              
          and (2) a purported cover letter conveying the election to the              
          IRS and describing the election as “an application for making               
          election under section 475(f)”.  In the election itself, under              


               3  The petition was signed by a representative of                      
          petitioner’s who was not admitted to practice before this Court.            





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