Patrick M. Shannon - Page 11

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               due process and have ordered that refunded.  The cur-                  
               rent transcript shows this has been done recently.                     
               There is no evidence that the taxpayer timely filed a                  
               return for 1999, with or with a signature.  The first                  
               return or copy of a return is the one signed May 31,                   
               2001.  The recorded extension date expired on August                   
               15, 2000.  The Service set up a substitute for a return                
               in May of 2002.  The Service started sending reports of                
               the 1999 liability in May of 2002.  Where there was no                 
               agreement, a Statutory Notice of deficiency was issued                 
               September 5, 2002.  The tax, penalty and interest were                 
               assessed on February 24, 2002 when the taxpayer didn’t                 
               petition the Tax Court.  The taxpayer had his opportu-                 
               nity to argue the tax, failure to file penalty, failure                
               to pay penalty and failure to pay estimated tax penalty                
               in Tax Court.                                                          
               After the assessment from the statutory notice, the                    
               taxpayer submitted his return with a larger liability.                 
               The account was adjusted to larger amounts on May 5,                   
               2003.  It appears the Service received the return                      
               earlier, approximately February of 2003, but the return                
               didn’t have an original signature.  Later this was                     
               rectified and the return was posted so the account                     
               could be posted.                                                       
               There is no long standing policy for the Service to                    
               waive the failure to file penalty when the taxpayer                    
               doesn’t submit a timely return.  There is no evidence                  
               it was ever timely filed, signed or unsigned.                          
               Regarding the failure to pay penalty, it is the tax-                   
               payer’s responsibility to ensure the tax liability it                  
               paid on time.  He cannot delegate that responsibility                  
               to a CPA or others.  The return submitted in 2003                      
               showed a larger liability than the Service set up                      
               earlier.  While you and the taxpayer contend the return                
               was filed in 2000 and the return has a copy of a signa-                
               ture in May of 2001, there were no payments towards the                
               liability except for some withholding that is question-                
               able.                                                                  
               I saw no evidence of reasonable cause to abate the                     
               penalty.  The taxpayer cannot rely on the CPA or others                
               to pay his liability and we saw no evidence that his                   
               medical condition prevented him from making payments.                  
               He was able to operate one or more corporations and                    





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Last modified: May 25, 2011