- 54 -
reduced to $62,225 and then $32,225). Dombrowski requested
“audit assistance”, which he received from George Guzzardo
(Guzzardo), an appeals auditor in respondent’s San Diego office,
in determining whether the Thompsons were entitled to the
requested interest. Guzzardo determined that the Thompsons’
$63,000 remittance on June 17, 1987, was an advance payment
rather than a cash bond. The distinction is important: An
advance payment resulting in an overpayment entitles the taxpayer
to interest on the overpayment; conversely, a cash bond does not
earn interest. Having concluded that the previously refunded
$62,225 was an advance payment, Guzzardo determined that the
Thompsons were entitled to additional interest of $31,511.17 as
of July 31, 1993. Dombrowski did his own computations, and then
asked Jean Samuels (Samuels), an experienced appeals auditor, to
check his and Guzzardo’s figures. Samuels advised that in the
main she agreed with both Guzzardo’s and Dombrowski’s
calculations. Relatively small differences in their results were
attributable to their use of different dates for the accrual of
interest.24
On September 17, 1993, Dombrowski sent Bakutes a memorandum
requesting approval to refund the interest on the Thompsons’
24Samuels saw that the refund included some previously
deducted interest, thus producing tax benefit income, but stated
in her memorandum to Dombrowski, “Most taxpayers would probably
either not know or not remember to include this [tax benefit
income] in income, since they won’t get a Form 1099 for it.”
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