-4-
payments due Tag Coal under the parties' contract. Tag Coal
filed mechanic's liens in an effort to collect these amounts.
The Commissioner notified Mr. Templeman and Mr. Adkins that
if Tag Coal did not pay its employment tax liability, then the
Internal Revenue Service (IRS) would proceed to collect such
liability from J & M and its assets.2
Sometime prior to August 27, 1984, Mr. Adkins indicated that
he wanted to withdraw as a partner from J & M. Mr. Adkins and
Mr. Templeman discussed the possibility of Mr. Templeman's buying
Mr. Adkins' interest in the partnership. Mr. Templeman also
discussed the situation with petitioner. Petitioner expressed an
interest in purchasing Mr. Adkins' partnership interest. At some
point prior to August 30, 1984, petitioner and Mr. Templeman
orally agreed to become equal partners in J & M.
On August 27, 1984, Mr. Adkins agreed to transfer his
50-percent partnership interest in J & M to Mr. Templeman. In
exchange, Mr. Templeman agreed, inter alia: (1) To assume and pay
all delinquent taxes by August 30, 1984, and (2) to relieve Mr.
Adkins of all liabilities relative to both J & M and Tag Coal.
Although an agreement was executed, it was never consummated and
was effectively abrogated by the parties.
2 As responsible officers of Tag Coal, Mr. Templeman and Mr.
Adkins would be liable for the 100-percent penalty under sec.
6672, and the IRS was of the view that their personal assets,
including their partnership interests in J & M, would be subject
to distraint.
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