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income tax was determined.3 Petitioners timely petitioned this
Court in response to that notice, and in due course, respondent
assigned the case to Appeals Officer Jeffery L. Sherrill (Mr.
Sherrill) for settlement purposes.
On August 1, 2003, after reaching a proposed settlement with
Mr. Sherrill as to the 1999 deficiency, petitioners received a
letter from respondent’s Appeals Office that stated the proposed
settlement was “reflected in the [attached] stipulated-decision
document” that ultimately would be submitted to the Court. The
letter also stated that “If there is an amount due as a result of
this settlement, it would be to your advantage to pay the full
amount now.” The letter contains no reference to petitioners’
then-outstanding 1999 tax liability that had been previously
assessed based upon the amount of tax reported on their 1999
return. On August 20, 2003, a stipulated decision reflecting a
$363 deficiency in petitioners’ 1999 Federal income tax was
entered in petitioners’ deficiency case.
Following the entry of decision by the Court, petitioners
remitted a payment of $363 to respondent with respect to the 1999
deficiency. According to petitioners, Mr. Sherrill led them to
believe that their 1999 tax liability would be fully satisfied by
this payment.
3 The deficiency resulted from petitioners’ failure to
report certain gambling income.
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Last modified: May 25, 2011