- 5 - refunded $88,000 to petitioner.5 Subsequently, respondent suspected that the refund was erroneous and began an audit of petitioner’s employment tax compliance.6 Respondent’s revenue agent Beth Nichols conducted the audit from approximately spring 2001 to 2003 when respondent issued the notice of determination. During the examination, Revenue Agent Nichols unsuccessfully attempted to obtain petitioner’s books and records, including its bank records, from petitioner’s agent, Dolores Rudd. After discovering that petitioner was using bank accounts in other names, Revenue Agent Nichols summoned the bank records from those accounts.7 Revenue Agent Nichols analyzed the bank records and conducted additional investigation of petitioner’s business activities. On the basis of her analysis, Revenue Agent Nichols concluded that petitioner was still in business8 and that 5Petitioner subsequently filed a refund claim for its 1999 employment taxes, which respondent ultimately denied. 6In 2002, the United States instituted legal proceedings against petitioner for the return of the erroneous refund. 7Respondent summoned bank records for accounts not in petitioner’s name but in the names of entities traceable to petitioner and into which petitioner’s receipts were deposited. Respondent traced activity in those accounts to petitioner’s business location and attributed the activity to petitioner for tax purposes. 8Petitioner does not dispute that business activity similar to petitioner’s regular business activity in 1999 occurred at petitioner’s business location in 2000 and 2001. Ms. Rudd testified that at least some of the same workers who performed services for Colorado Mufflers in 1999 performed similar services at petitioner’s business location in 2000 and 2001.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: November 10, 2007