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search his records to obtain information not provided to him
under either of the ways set forth in section 6223(c)(1) and (2).7
When the FPAA was mailed to petitioner on January 25, 2005,
respondent possessed and had sufficient readily available
information establishing petitioner’s name, address, and indirect
profit interest in Ovation. First, on August 31, 2001,
petitioner filed his personal income tax return identifying his
relationship to and beneficial interest in CM Trust. Second, on
September 6, 2001, Ovation filed its partnership return
identifying CM Trust as a general partner in Ovation with a
13-percent interest. Third, on September 9, 2001, CM Trust filed
its trust return reporting that CM Trust was petitioner’s grantor
trust for Federal income tax purposes and that CM Trust had a
direct ownership interest in Ovation. These three returns, each
of which related to petitioner or CM Trust, established a
sufficient basis for respondent to conclude that petitioner,
through CM Trust, had a 13-percent indirect profits interest in
7 As stated in the temporary regulations:
In addition to the information on the partnership
return and that supplied on statements filed under this
section, the Internal Revenue Service may use other
information in its possession (for example a change in
address reflected on a partner’s return) in
administering subchapter C of chapter 63 of the Code.
However, the [Internal Revenue] Service is not
obligated to search its records for information not
expressly furnished under this section. [Sec.
301.6223(c)-1T(f), Temporary Proced. & Admin. Regs., 52
Fed. Reg. 6784 (Mar. 5, 1987).]
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Last modified: November 10, 2007