Royce A. Ellis - Page 6
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the income reported on the Forms 1099-MISC and the income
reported on petitioner’s 2001 return.
In response, on June 30, 2003, Mr. Townshend mailed a letter
to the Ogden Service Center explaining the discrepancies,5 which
included a copy of petitioner’s 2001 Schedule C, and a record of
petitioner’s 2001 bank deposits with respect to Coastal Builders.
The letter also stated petitioner’s bank statements for 2001 were
in respondent’s possession and provided Agent Bok’s contact
information. On August 18, 2003, the Ogden Service Center mailed
a CP-2005 Closing Notice for tax year 2001, which stated:
Thank you for providing us with additional
information about the issue we recently wrote you
about. We are pleased to tell you that, with your
help, we were able to clear up the differences between
your records and your payers’ records. * * * .
If you have already received a notice of
deficiency, you may disregard it. You won’t need to
file a petition with the United States Tax Court to
reconsider the tax you owe. If you have already filed
a petition, the Office of the District Counsel will
contact you on the final closing of this case.
Although the investigation was closed by the Ogden Service
Center, the overall examination of the years at issue continued,
and Revenue Agent Byron W. Daniels replaced Agent Bok as the
Agent performing the examination. Using the bank deposits method
to reconstruct the income petitioner earned from doing business
5 Mr. Townshend explained to the Ogden Service Center that
two of the Forms 1099-MISC were inaccurate and the other two were
respondent’s replacements containing petitioner’s corrected
earnings information for 2001.
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Last modified: November 10, 2007