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sent to ISOA, Inc., stated, in part, that the company had failed
to report $195,000 of income in 1995 which had been erroneously
classified by petitioners as “deferred income”. Specifically,
Agent Sutton noted that ISOA, Inc., received the $195,000 in
licensing fees from the company’s clients with no restrictions on
the use of the funds and that the licensing fees had been
deposited in the company’s bank account like all other receipts
by the company.
By letter dated October 28, 1998, Anthony Rebollo (Mr.
Rebollo), an attorney hired by petitioners, protested the 30-day
letters issued to petitioners, Beacon, and ISOA, Inc., and
requested an Appeals conference to discuss respondent’s proposed
adjustments made with respect to all of the tax returns under
examination. Mr. Rebollo also noted, in part, that “the
taxpayers’ records are voluminous and, with respect to some
issues, can be difficult and time consuming to analyze” and that
petitioners’ “extremely hectic schedule requiring extensive
travel and a great deal of stress” had “contributed to some of
the problems” in petitioners’ case.
In November 1998, petitioners were notified that their case
had been transferred to respondent’s Appeals Office. Appeals
Officer Estevan Medina (Appeals Officer Medina) was assigned to
review petitioners’ 1993 through 1996 taxable years. By letter
dated March 11, 1999, Appeals Officer Medina informed Ms.
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Last modified: November 10, 2007