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2002, and filed their 1997 return with the IRS on May 6, 2002.
The IRS has no record of an amended return being filed for 1996,
and the $1,160 overpayment shown on petitioners’ amended 1996
return was never credited toward petitioners’ 1997 tax liability.
On May 30, 2003, the IRS issued separate but identical
notices of intent to levy to Mr. and Mrs. Grandelli at their
correct address. The tax assessed was based upon petitioners’
1997 joint return. Petitioners concede that the assessed balance
of tax due on the May 30, 2003, notices of intent to levy is
correct. The erroneous assessment against Mrs. Grandelli
individually has been abated, and the assessment on the May 30,
2003, notices of intent to levy is the underlying liability upon
which interest and penalties have accumulated.
Petitioners submitted a request for abatement of interest
and penalties for 1997 by letter dated September 13, 2003, which
respondent received on October 16, 2003. Petitioners claimed
that they were entitled to relief under section 6404(e) because
the IRS did not notify them in a timely manner that it had not
received their 1997 return. Petitioners also stated that they
should not be penalized for the fact that the IRS did not receive
their amended 1996 return, which showed a refund to be credited
toward their 1997 liability, because they had a reasonable
expectation that the IRS would receive the returns that they
mailed.
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Last modified: March 27, 2008