Timothy Patriot†††
1776 Patriot Way
Grand Junction CO.

May 24, 2007

Appeals Office
Richard Gullion
1244 Speer Blvd.
Denver, CO 80204

†Dear Mr. Gullion,

In regards to the meeting I had with Jean Walker (Tax Examiner) on May 23, 2007 at 1:30 PM location 400 S Rood Ave. Rm. 106 Grand Junction CO. I feel the meeting was not productive for you or me. I did not have all files necessary to accommodate what Jean Walker was capable of doing. I was under the assumption we were going to come up with some type of settlement agreement. I feel that she only knows how to try and pry information and not stick with what the facts at had are, which we have on the Letter of Deficiency.†

In the examination with Jean Walker she alleges that I made almost 100,000.00 more than what the 1099ís show. Also in here figuring she has very little deductions as possible. Jean Walker has no business and operating expenses figured in as legitimate deductions. As a result of the IRS investigating 1099ís and earnings has cost me a considerable amount of work in my area. This is a small community and word gets around and they do not want to have to be bothered by the IRS tying up more time to get information on a subcontractor. This has been very negative on my future as a small business man trying to make a living in such a small community which has led me to try and find work farther from my local community. As a result I have now incurred more business expenses due to having to travel farther for the same work.

The Cohen v. CIR case shows that in tax court, you can use reasonable figures, instead of figures conjured by the IRS that cannot be correct. You can also reconstruct lost paperwork to substantiate your deductions and business expenses.

Further, you can claim a percentage of business expenses and profit for a business enterprise, even if you have no records to substantiate your business expenses.

The 9th Circuit Court ruled in Cohen v. CIR, 266 F 2d 5(1959):

''* * * We think our only proper course is to approach the problem indirectly by analysis of the record in the light of the principles established in Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930). Our objective will be, after resolving any reasonable doubts against petitioner, to reconstruct his gross income as betting commissioner at a figure which in our judgment it would be unlikely to exceed in fact. (Petitioner, it is clear, has failed to establish a lesser amount.)''

The purpose of the IRS is to collect taxes, not to brow beat hard working citizens who are unable to keep records because they struggle to make a living and work harder in distant locations. Due to my occupational travels, I am unable to maintain all the records that you seek. However, we all know that I did incur large expenses for out of town work. †

I request an out of court settlement of 90% business and operating expenses, waive penalties, with a 10% income, which I believe is a fair assessment of all the information the IRS has collected. I have and I am trying to continually cooperate with the IRS and their agents.


Timothy Patriot