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May 5, 2003, petitioners submitted to respondent a section
7430(g) qualified offer in the amount of $6,000. Respondent did
not accept petitioners’ settlement offer.
On August 12, 2003, respondent held an Appeals conference
with petitioners’ representative. Before the conference, Appeals
Officer Melvin M. Chinen had provided to petitioners the
information missing from the notice and had agreed to correct the
computational error. According to Appeals Officer Chinen, the
two main issues in the case were: (1) Whether petitioner Robert
C. McKee was a dealer in real estate, whose sales of undeveloped
ranch property parcels would be taxed as ordinary income; and (2)
whether certain losses petitioners claimed are limited under
sections 1366(d), 465, and 469.
As a result of the Appeals conference, the parties reached a
settlement. In resolving the dealer in real estate issue,
pursuant to petitioners’ offer, the parties agreed to treat 50
percent of the parcel sales as sales of dealer property, subject
to ordinary income tax, and the other 50 percent as sales giving
rise to capital gains.
In June 2002, when petitioners retained Mr. Feurzeig’s law
firm, Titchell, Maltzman, Mark & Ohleyer, P.C. (the law firm),
petitioners agreed to a fee arrangement of $300 per hour. The
law firm expended a total of 202.8 hours on petitioners’ case.
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Last modified: May 25, 2011