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setting forth the terms to which petitioner had agreed, as well
as a requirement that petitioner timely file his tax return for
2003, and pay in full any tax due for that year. Mr. Lin warned
petitioner that his case might be closed and the collection
action sustained, if he failed to to satisfy the conditions in
the letter.
Petitioner failed to satisfy the conditions by the deadline.
Instead, he telephoned Mr. Lin and requested an abatement of
additions to tax and interest. Mr. Lin faxed petitioner an
updated listing of his outstanding tax liabilities for 1997
through 2002, and a copy of the relevant provisions of the
Internal Revenue Manual regarding Reasonable Cause for Penalty
Relief.
In response, petitioner faxed Mr. Lin a letter in which he
explained that he does not believe that he owes anything for 1997
because his tax attorney changed his accounting method from
accrual to cash. He also stated that all additions to tax for
tax years 1998 through 2003 should be waived because he exercised
ordinary business care and prudence and the additions to tax were
causing undue hardship. Attached to the letter were copies of
petitioner’s Schedules C, Profit or Loss From Business, for 1994
through 1996, and a copy of the first page of petitioner’s
responses to a request for admissions from a lawsuit in which
petitioner was a plaintiff.
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