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Montgomery instructed Ms. Keil to forward to him any
tax-related document that she received as to the subject years,
and he told her that he would take care of those documents. On
November 21, 2000, respondent mailed to Ms. Keil a notice of
deficiency determining a $518,939 deficiency in CCC’s 1994
Federal income tax and related additions thereto totaling
$233,522.55. She forwarded that notice to Montgomery, and he
petitioned the Court with respect to it. On July 13, 2001, the
Court dismissed CCC’s case as untimely filed. Montgomery never
told Ms. Keil that CCC’s case was dismissed. Approximately 6
weeks before that dismissal, Montgomery had noted that the
Court’s dismissal of CCC’s case as untimely filed would cost CCC
approximately $1.2 million to litigate its case in a U.S.
District Court.
On June 25, 2002, respondent issued to petitioners the
notice of deficiency as to their 1993 and 1994 Federal income
taxes. As to those respective years, the notice determined
income tax deficiencies of $862,621 and $1,528,818, section
6651(a)(1) additions to tax of $216,761 and $382,405, and section
6662(a) accuracy-related penalties of $172,524 and $305,764. On
or about September 22, 2002, petitioners authorized Montgomery to
petition the Court with respect to this notice. On September 26,
2002, Montgomery filed such a petition with the Court, seeking a
redetermination of unreported income, business expenses, personal
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