- 14 -
Rule 41(b). Accordingly, petitioner’s underlying liability for
1989 is properly before the Court, and we review that issue de
novo.8 See Sego v. Commissioner, supra; Goza v. Commissioner,
supra. We shall review the remainder of respondent’s
determination for 1989 for an abuse of discretion. Sego v.
Commissioner, supra.
III. Underlying Tax Liability
The evidence establishes that petitioner did not receive $5
million in business income in 1989.
IV. Abuse of Discretion
A. Evidentiary Issue
Respondent argues that we should be limited to the
administrative record in deciding whether the settlement
officer abused his discretion. At trial, respondent objected to
the introduction of evidence offered by petitioner to prove an
abuse of discretion where that evidence was not provided to the
settlement officer. The Court noted respondent’s objection but
allowed testimony to proceed. On brief, however, respondent
stated that the Court should consider the testimony of the
8 We note that at the time he filed the petition and as of
the date of trial, we had not ruled whether in sec. 6330 cases
taxpayers could challenge the existence or amount of a tax
liability reported on their original return (as is the case
herein). In Montgomery v. Commissioner, 122 T.C. 1 (2004), we
held that in sec. 6330 cases taxpayers can dispute tax
liabilities reported on their original return.
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