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petitioner for the year 1999 from Bear, Stearns Securities Corp.
(Bear Stearns) and a two-page summary in which he reported his
cost bases in the stocks and bonds sold during 1999, with the
exception of securities in the Bidwell Co. (Bidwell) described in
the Form 1099-MISC. The Bear Stearns information petitioner
presented showed cost bases for those securities purchased in
1999. Petitioner also claimed a $21,228 mortgage interest
expense for the taxable year 1999 in his letter. This expense
was supported by third-party documentation. Respondent did not
allow this mortgage interest expense in preparing the substitute
for return for 1999. In a reply letter dated June 14, 2004, the
Appeals officer advised petitioner to file an income tax return
for the taxable year 1999 in order to obtain credit for the cost
bases he reported in his summary and for the mortgage interest
expense he claimed. Also in the letter of June 14, 2004, the
Appeals officer advised petitioner that she would be issuing a
notice of determination, sustaining respondent’s proposed lien
collection action, should petitioner fail to file an income tax
return for the year 1999 by June 18, 2004. Petitioner received
the June 14, 2004, letter. Petitioner did not file an income tax
return for 1999. On July 9, 2004, the Appeals officer attempted
to contact petitioner via telephone. Petitioner did not respond.
The Appeals officer issued a notice of determination to
petitioner on August 4, 2004, sustaining the proposed lien action
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Last modified: May 25, 2011