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complete the examination. I am requesting that the
power of attorney for Mr. John W. Townshend be
bypassed, as his apparent non-cooperation and lack of
communication is delaying and hindering the examination
process.
On January 3, 2003, Agent Bok’s request to bypass Mr. Townshend
and to contact petitioner directly was granted. Neither
petitioner nor Mr. Townshend received notice of respondent’s
bypass.
On January 24, 2003, respondent issued to petitioner a
notice of audit with Form 4564, Information Document Request,
informing petitioner his 2001 tax year was under examination and
requesting he provide books, records, and other documentation
with respect to Coastal Builders. At a March 24, 2003, meeting,
between Mr. Townshend and Agent Bok, Mr. Townshend provided a
2001 general business ledger for Coastal Builders. The ledger
had been prepared for the audit because petitioner did not keep
contemporaneous books and records of Coastal Builders’ business
income and expenses. Although Agent Bok and Mr. Townshend
discussed 1999 and 2000, no documentation was exchanged.
On June 23, 2003, during the audit, respondent’s Service
Center in Ogden, Utah (Ogden Service Center), mailed a CP-2501
letter to petitioner indicating that JPI filed four Forms 1099-
MISC showing petitioner received $5,704,041 from JPI in 2001.
The letter requested information explaining a discrepancy between
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Last modified: November 10, 2007