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In their motion for reconsideration, petitioners assert
that, (1) contrary to our conclusion in McKee I, they had
provided to respondent all relevant information under their
control, and (2) our determination that respondent’s position had
a reasonable basis in both fact and law failed to consider
respondent’s position with respect to a proposed increase in tax
under section 453(l)(3).2 In response, respondent contends that
petitioners’ allegations of error are not based on new evidence
and merely restate and elaborate upon arguments petitioners made
in McKee I.
A. Presentation of Relevant Information
In McKee I, we stated:
The only information petitioners had provided before
respondent filed the answer was the information
contained in Mr. Potter’s letter. In the letter, Mr.
Potter set forth petitioners’ disagreements with
respondent’s proposed adjustment but included no
supporting documents or other proof of his assertions.
Respondent was not required to concede the case on the
basis of Mr. Potter’s letter alone. * * *
Petitioners allege that “the Court was in error in requiring
documents in Petitioners’ possession when Respondent possessed
2Sec. 453(l) defines dealer dispositions of property for
purposes of reporting income from installment sales. Sec.
453(l)(3) provides that, for installment obligations regarding
timeshares and residential lots as described in sec.
453(l)(2)(B), the tax on payments received pursuant to the
obligations is increased by the amount of interest determined
under sec. 453(l)(3)(B). Carlson v. Commissioner, 112 T.C. 240,
242-243 (1999).
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