- 13 -
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
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011