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funds. He timely filed his returns for 1995, 1996, 1997, 1999,
and 2000.6 Except for 1995, petitioner’s returns indicate that
petitioner was entitled to refunds. For 1998, petitioner was
entitled to a refund. Before respondent issued the notice of
determination, petitioner had filed his 1998 return. Indeed,
when petitioner received the notices from the IRS, he called Mr.
Coy to discuss them and also forwarded the notices by fax to Mr.
Coy, as he was “scared to death”.
Additionally, Mr. Talbott did not have an open mind to the
issues Mr. Coy presented at the hearing. He did not consider
that petitioner had acted in good faith. Mr. Talbott did not
consider petitioner’s pattern of filing of returns on or about
October 15, despite having looked at the transcripts for 1995,
1996, 1997, and 1999.
Mr. Talbott did not have an open mind regarding
reinstatement. Moreover, he failed to independently analyze
whether the terms of the offer-in-compromise had been materially
breached. Mr. Talbott believed he had no authority to reinstate
petitioner’s offer-in-compromise. He believed only the National
Office could reinstate the offer-in-compromise. Neither the
Internal Revenue Code nor the Internal Revenue Manual, however,
states that he could not reinstate the offer-in-compromise. Mr.
6 We note that by the terms of the offer-in-compromise, the
offer-in-compromise did not apply to 2000.
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