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consider a nominee theory and to look at petitioner’s “money
stream” were substantive in nature and clearly constituted
prohibited ex parte communications that were per se prejudicial
to petitioner.
Respondent argues that grounds independent of the ex parte
communications would support the Appeals Office’s adverse
determination (namely, petitioner’s conviction for tax evasion
and noncompliance by petitioner’s eldercare business with certain
Federal employment tax laws). These alleged grounds do not
overcome or render moot the prohibited ex parte communication
rules, as respondent appears to argue.
Respondent also argues that because petitioner eventually
learned from the Appeals officer the content of the ex parte
communications, petitioner was not kept in the dark with regard
thereto and was not harmed. Nothing, however, in either RRA 1998
or Rev. Proc. 2000-43, supra, allows respondent’s Appeals officer
to avoid the rule against prohibited ex parte communications by
later informing the taxpayer about the communications.
Respondent characterizes the ex parte communications as
“routine factual investigation.” We disagree. Although the ex
parte communications may have been in good faith and intended to
assist in the development of relevant facts, they were ex parte
and substantive, and they were covered by the prohibition
discussed above.
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