Gary C. and Maru E. Johansen - Page 12

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               Respondent, in turn, contends that petitioners failed to               
          respond to TCO Harris’s requests for information in connection              
          with the examination of their 2002 return.  As a result, the IRS            
          sent to petitioners a 30-day letter dated September 14, 2004,               
          notifying petitioners that they should request a conference with            
          an Appeals officer if they did not agree with the proposed                  
          adjustments to their return.                                                
               Petitioners also rely on Minahan v. Commissioner, 88 T.C.              
          492, 502-503 (1987), to argue that they fall within the purview             
          of the exception under section 301.7430-1(f)(2), Proced. & Admin.           
          Regs.  In Minahan, however, the taxpayers did not receive a 30-             
          day letter.  Minahan v. Commissioner, supra at 502.  Petitioners            
          do not argue that they did not receive a 30-day letter from                 
          respondent.  Regardless of the letter from the Appeals Office               
          dated May 12, 2005, the 30-day letter clearly gave petitioners an           
          opportunity to seek an Appeals Office conference prior to the               
          issuance of the notice of deficiency.  Therefore, the exception             
          under section 301.7430-1(f)(2), Proced. & Admin. Regs., does not            
          apply.                                                                      
               Petitioners’ meetings with an Appeals officer, upon                    
          receiving the statutory notice and after filing a petition with             
          the Court, does not satisfy the exhaustion of administrative                
          remedies requirement.  See Polyco, Inc. v. Commissioner, 91 T.C.            








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