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Mr. Cowie provided regular reports regarding the investments
to Dr. Cowie. Likewise, Mr. Cowie provided the information
necessary for Dr. Cowie to complete his annual tax returns.
Mr. Cowie and Dr. Cowie reported their respective shares of
the taxable transactions from Mr. Cowie’s brokerage account on
their tax returns. The brokerage firm, however, issued only one
Form 1099-B, Proceeds From Broker and Barter Exchange
Transactions 2003, to Mr. Cowie reporting all of the account’s
taxable activity.
On February 7, 2005, respondent sent petitioners a draft
CP2501 notice listing 75 items where a discrepancy occurred
between the amounts reported by the brokerage firm on Form
1099-B, and those reported on petitioners’ return for taxable
year 2003. On March 31, 2005, petitioners responded, stating
that the full amount of each transaction was reported by Mr.
Cowie and Dr. Cowie on their respective returns and providing
supporting information.
Petitioners received a CP2000 notice dated June 20, 2005,
stating that respondent had not received a response to the
February 7, 2005, notice. On June 22, 2005, petitioners sent
their response again. Subsequently, petitioners received a
letter dated August 22, 2005, that requested that petitioners
provide information on a completed Schedule D, Capital Gains and
Losses.
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Last modified: November 10, 2007