Marilyn Patriot
Buffalo, WY 82834

Martin B. Kaye
IRS, Area Counsel
1244 Speer Blvd., #500
Denver, CO 80204-3583

In Re: Marilyn Patriot v. CIR; Docket no: 4173-08

Dear Mr. Kaye

I want an out of court settlement. I expect you to abate the penalties and allow my business expenses. Then I will file a tax return for the tax years in question, for 2004 and 2005.

Do I send the tax returns to you or to the service center? I will file jointly with my husband.

I had additional expenses that you have not taken into account and some of your figures are incorrect.

I had a home office to manage my pension and my IRAs. I had expenses of $1000 for that.

In 2004, the IRS took $2300 out of my SS check. In 2005 the IRS took $1200 from my SS check. They also took a large amount of money out of my pension. The IRS took from my Michigan Pension during 04 and 05 about $945 per month. How does this affect my liability?

Your records are incorrect for 2004. I did not receive $41,000 from AIG in 2004, but I did receive that amount in 2005. I did not receive $41,000 for both years. According to the attached statement from AIG, I received $41,245.26 on January 3, 2005. Please correct this math error, I can send you more paperwork if you like. I wrote AIG and they are sending me a letter stating that I did not receive a distribution from them in 2004. I will send you a copy soon.

I was entitled to a distribution because I was over age 65 those years. Also you are taxing the principle of the amount I contributed. You can only tax the capital gains and interest.

I agree to a telephone conference with you on an agreeable date. However this letter should cover everything.

I will file my Response to Stipulations separately. I will send you any papers I have in a separate letter.

Sincerely,

Marilyn Patriot
Date: ____________________