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1993.5 Petitioners did not explain to respondent during the
administrative proceedings or to this Court why they did not
provide the other information that Gurnaby had requested.
In deciding whether respondent had a basis in fact, we may
take into account that respondent diligently sought but
petitioners did not provide certain relevant information. This
situation differs from that in Powers v. Commissioner, supra, in
which the Commissioner made no effort to contact the taxpayer
before issuing the notice of deficiency. Id. at 476. Sims and
Gurnaby communicated extensively with petitioners and Leiba,
stated their objections to petitioners’ claim, and repeatedly
asked them for specific information.
Respondent had a basis in fact for concluding that
petitioners were liable for the late payment addition for 1993.
Thus, respondent reasonably concluded that petitioners were
liable for the late payment addition for 1993.
c. Petitioners’ Contentions
Petitioners contend that respondent lacked a basis in fact
for concluding that they were liable for the late payment
addition for 1993 because (i) respondent did not adequately
consider petitioners’ bankruptcy and the sale of their home due
5 There was considerable disagreement at trial about
whether documents should be admitted in evidence. We have
considered all of the documents in the record, including
documents offered by petitioners but not admitted. The exclusion
of documents did not affect the result in this case.
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