Kristin J. Calitri - Page 14

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          prior to the issuance of the statutory notice of deficiency.                
          From the time when respondent sent petitioner the initial                   
          appointment letter in January 2004, to the time when the parties            
          finally met in May 2004, petitioner had canceled two meetings and           
          had established a history of not responding to telephone calls              
          and document requests from respondent.  Therefore, it was not               
          unreasonable under the circumstances for respondent to issue a              
          statutory notice of deficiency to avoid the expiration of the               
          period of limitations when petitioner refused to consent to an              
          extension.  See Wasie v. Commissioner, 86 T.C. 962, 970-971                 
          (1986); Chaum v. Commissioner, 69 T.C. 156, 163 (1977).                     
               Petitioner contends that it was respondent’s delay in                  
          commencing the audit that caused the shortage of time for                   
          examination.  Petitioner further contends that respondent failed            
          to adhere to the guidelines under Internal Revenue Manual pt.               
          4.10.2.2.2 (May 14, 1999), which provide that the examination and           
          disposition of income tax returns is to be completed within 26              
          months for individual returns after the due date of the return,             
          or the date filed, whichever is later.                                      
               There is a rebuttable presumption of no substantial                    
          justification if the IRS “did not follow its applicable published           
          guidance in the administrative proceeding”.  Sec.                           
          7430(c)(4)(B)(ii).  “Applicable published guidance” is defined as           
          “final or temporary regulations, revenue rulings, revenue                   
          procedures, information releases, notices, announcements, and if            





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