Free Response to Motion [Dispositive] - District Court of Federal Claims - federal

Case 1:05-cv-00955-LAS

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Department of the Treasury Internal Revenue Service
Small Business/Self Employed Div. California Examination Area 7 San Francisco Field Office
EXHIBIT

FAX COVER SHEET
To: Robert Stientjes Recipient's Fax Number; 314-91$-7120 Date; V18/2005 Time: Robert J. Gee, ATAT Exam Group Manager Bade No. 94-011241 Company ; From: For Information Call; (415) 522-6119

Subject: D. Gordon Potter 1998 Amended Return

Originating )vax Number, (415) 522-6277 Pages: (Including Cover Sheet): 9 pages

Please seethe attached letter.

Internal Revenue Service 450 Golden Gate Avenue, Mail Stop SF-6107 San Francisco, California 94102
This communication is intended for the sole use of the individual to whom it is addressed and may contain information that is privileged, confidential, and exempt from disclosure under applicable law. I f the reader of this communication is not the intended recipient, or the employee or agent for delivering the communication to the intended recipient, you are hereby notified that any dissemination, distribution, or copying of this communication strictly prohibited. If you have received this communication in error, please notify the sender immediately by telephone call and destroy the communication. Thank you.

is

Case 1:05-cv-00955-LAS
AUG-18-2005 17:05

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DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE Washington, D.C. 20224 SMALL BUSINESS/SEI,F-EMPLOYED DIVISION

August 18, 2005 DELIVERY BY FAX: (314) 918-7120 Mr. Robert J. Stientjes 41 South Old Orchard, Suite B Webster Groves, Missouri 63119
450 Golden Gate Avenue, EG 1274 San Franci$co, CA 94102

Person To Contact: Robert J. Gee Telephone Number; (415) 522-6119 Fax Number: (415) 522-6277 Refer Reply To: Exam Group 1574

Re: Dean Gordon Potter --1998 Claim for Refund Dear Mr. Stientjes, I'm reviewing your client's amended return (copy attached) and the correspondence we intend ,on sending out that will deny the claim for refund. However, before 1 sign off on everything, I have some additional questions that require your explanation. Your amended return on Line 10, column C states that the correct tax is $73,577. On Line 22, your amended return shows an amount of $431,631. The instructions on the form state to compute this amount by taking the amount from Line 10, Column C ($73,577) and subtracting it from Line 20 ($431,631). Thus, according to the instructions, Line 22 should show $358,054 instead of $431,631. Lastly, Line 23 on your amended return shows an amount of $431,631 that you want refunded which is greater. than the amount that should be showing on Line 22 ($$58,054). In addition, on the last page of your amended return that is entitled "Request for Immediate Refund Claim Disallowance" the third paragraph states:

This Request for Refund Claim Disallowance is for the taxable year 1998 of taxpayer-for-federal income tax. The amount of this refund claim is equal to $430,544.
is your request for a refund in fhe amount of $358,054, $431,631 or $430,544? The amount of $431,631 shown on the face of your amended return and the amount of $430,544 shown on the last page indicate to me that you are essentially asking for a refund of ALL taxes paid in 1998. This means to me that you are reversing all income and expenses reported and bringing the tax paid to zero. In reviewing the narrative

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AUG-18-2005 17:06

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attached to your amended return, there is no mention of why such a position is being taken. I also was trying to read IRM 4512(2)(g) (Jan 30, 1987) that you cited in your amended return. Do you have a more recent cite e.g. Chapter 4 of the IRM, that incorporates what is in former IRM 4512(2)(g)?
I would appreciate a written response to the questions that I've raised. You can fax your response to me at (415) 522-6277.

Robert J. Gee Group Manager

cc: Dean Gordon Potter