William R. and Betty O. Bass - Page 4




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          agreement that the outcome of the Cal-Neva case was to be                   
          determined in accordance with the outcome of Utah Jojoba I                  
          Research v. Commissioner, docket No. 7619-90.  On January 5,                
          1998, the Court’s opinion in Utah Jojoba I Research v.                      
          Commissioner, T.C. Memo. 1998-6 (Utah Jojoba I Research), was               
          filed, and, pursuant to that opinion, a decision sustaining                 
          respondent’s adjustments was entered on January 8, 1998, in that            
          case.                                                                       
               At the time the decision in Utah Jojoba I Research became              
          final, the tax matters partner in the Cal-Neva case, Benham,                
          could not be located.  Ultimately, respondent filed a Motion for            
          Entry of Decision in accordance with the Stipulation to be Bound.           
          By order dated February 1, 2005, the partners of Cal-Neva were              
          directed to show cause why respondent’s Motion for Entry of                 
          Decision should not be granted.  No response to the Court’s order           
          was received.  Decision in the Cal-Neva case, docket No. 6594-87,           
          was entered April 11, 2005.  A copy of the decision was served on           
          petitioner.  The decision in docket No. 6594-87 became final                
          July 11, 2005.  The notice in the instant case was sent June 19,            
          2006, within 1 year of finality of the partnership proceeding.              
          The additions to tax in issue here were based on $7,020, which              
          the Internal Revenue Service (IRS) determined to be the                     
          deficiency in income tax attributable to the Cal-Neva deductions            
          claimed by petitioners on Schedule C of their 1982 return.                  







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