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would destroy petitioners’ ability to pay their tax liabilities
and how petitioners would be able to pay those liabilities in
full in 18 months. On or about April 6, 2002, McKinnon faxed a
response to Riley. McKinnon’s response stated, in pertinent
part:
If a tax lien is filed, taxpayer’s lenders will
call the notes on which taxpayer’s assets are pledged.
This would put the taxpayer out of business with no
resources to pay the IRS.
Taxpayer believes that he will be able to sell the
encumbered assets within the next 18 months and clear
enough to pay the IRS in full.
On July 17, 2002, Riley issued a Final Notice-Notice of
Intent to Levy and Notice of Your Right To a Hearing (final
notice) to each petitioner for their unpaid income tax
liabilities for 1999 and 2000. Clawson’s final notice included
the unpaid amount of the trust fund penalty that had been imposed
against him for 1991. Riley sent a copy of the final notice to
McKinnon along with a letter that provided the following
explanation:
We are taking this action because the taxpayer has not
made Estimated Tax payments for 2000, 2001, nor 2002.
He has only paid seven of ten promised payments toward
the liability as you had suggested in September of
2001. According to the 2000 Income Tax return, he has
increased his liability substantially via a capital
gain that was not used to pay his tax obligation.
On July 31, 2002, the IRS Office of Appeals denied
petitioners’ Collection Appeal Request of September 19, 2001.
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