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reported by petitioner on his 1996 gift tax return. As in the
examiner’s report, this schedule revalued the gifts based on
disallowance of the cost of sale deduction for the value of
partnership assets and a reduction in the fractional partnership
interest discount from 62.5 percent to 15 percent. Even though
the deficiency notice informed petitioner of his entitlement to
file a petition for redetermination of the deficiency with this
Court, he did not do so.
On July 31, 2000, respondent assessed the gift tax
deficiency of $367,623 and interest in the amount of $115,948
with respect to calendar year 1996. Notice and demand for
payment was sent to petitioner.
On April 25, 2002, respondent sent to petitioner a Final
Notice - Notice of Intent to Levy and Notice of Your Right to a
Hearing. On April 25, 2002, respondent also sent to petitioner a
Notice of Federal Tax Lien Filing and Your Right to a Hearing
Under IRC 6320.
Petitioner timely requested a hearing by submitting a Form
12153, Request for a Collection Due Process Hearing. In his
request, petitioner explained in detail his contentions that the
deficiency notice issued on March 20, 2000, pertained to 1995,
that a deficiency notice was never issued for 1996, and that
therefore the assessment should be abated. A conference was
scheduled, and petitioner’s representative sent respondent’s
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