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of goods sold and business expenses, (2) respondent refused to
proceed with the audit unless petitioner agreed to extend the
period of limitations to assess the 2000 and 2001 income taxes,
and (3) respondent failed to follow certain guidelines under
Internal Revenue Manual pt. 4.10.2.2.2 (May 14, 1999), regarding
when returns should be examined.
The Court has reviewed a copy of respondent’s Examining
Officer’s Activity Record (Activity Record), copies of
petitioner’s correspondence with respondent, and other relevant
evidence, and is persuaded that petitioner had numerous
opportunities, prior to the issuance of the statutory notice of
deficiency, to present documentation that would substantiate her
cost of goods sold and business expenses.
According to the Activity Record, petitioner requested and
was granted a rescheduling of the initial January 8, 2004,
meeting to February 3, 2004. On the day before the February 3,
2004, meeting, petitioner phoned and left a message with the
examining agent to cancel the meeting. By letter dated February
13, 2004, petitioner requested a meeting “after the filing season
ends April 15, 2004”, so that her accountant could review her
records and prepare for the examination.
The examining agent made numerous telephone calls to
petitioner during the weeks of March 5, March 12, and March 29,
2004, to reschedule the meeting, but petitioner failed to return
the calls. On March 26, 2004, respondent’s group manager left
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