Michael Cipolla - Page 4

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               it can only be a derivative of corporate activity.                     
               * * *                                                                  
          Respondent’s Notice of Deficiency                                           
               On February 23, 2000, respondent (acting through Carol M.              
          Landy, Director of the Brookhaven Customer Service Center in                
          Holtsville, New York) issued a notice of deficiency to petitioner           
          for 1997.  In the notice of deficiency, respondent determined a             
          deficiency of $12,113 in Federal income tax.2  Respondent                   
          determined that petitioner failed to report wages of $60,833, as            
          well as dividends of $20, a gross distribution of $222, interest            
          of $33, and a prior year refund of $341.                                    
               Petitioner received the notice of deficiency.  Petitioner              
          did not file a petition for redetermination with the Tax Court.             
               On September 11, 2000, respondent assessed the determined              
          deficiency, plus statutory interest.  On that same date,                    
          respondent sent petitioner a notice of balance due.  Petitioner             
          failed to pay the amount owing.                                             
          Respondent’s Notice of Intent To Levy and Petitioner’s Response             
               On January 18, 2001, respondent sent petitioner a notice               
          entitled: “Final Notice--Notice of Intent to Levy and Notice of             
          Your Right to a Hearing.”                                                   


               2  Respondent determined the deficiency without taking into            
          account the tax withheld from petitioner’s wages, as a statutory            
          notice of deficiency does not take such withheld amount into                
          account.  See secs. 31(a), 6211(b)(1).  However, insofar as                 
          petitioner’s ultimate tax liability is concerned, respondent                
          gives petitioner credit for the amount withheld from his wages.             





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