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Soon after the case was transferred, the IRS requested that
petitioner and her spouse consent to extending the period of
limitations for assessment of the tax due on the 1990 tax return.
When they refused to consent to the extension, the IRS disallowed
their claimed Schedule C expenses due to lack of substantiation.
The disallowance of the Schedule C expenses, which also led to
the disallowance of a small amount of itemized deductions on
Schedule A, resulted in a deficiency of $3,204.
Respondent prepared a statutory notice of deficiency dated
July 22, 1997, for issuance to petitioner and her spouse for
1990, reflecting a deficiency of $3,204 and additions to tax
under section 6651(a)(1) and (2) and an accuracy-related penalty
under section 6662. No petition for a redetermination of the
deficiency was filed in this Court, and the IRS assessed the
deficiency, additions, and penalty on December 19, 1997.
In September of 1999 the IRS sent to petitioner and her
spouse Letter 1058, Final Notice of Intent to Levy and Notice of
Your Right to a Hearing. The letter notified them that the IRS
intended to levy on their property and rights to property to
collect their unpaid liabilities for 1990, and of their right to
request a hearing with the Appeals Office before execution of the
levy. Although petitioner received a copy of the notice of
intent to levy and right to a hearing, she did not request a
hearing with Appeals.
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