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that reasonable compensation for a C.P.A. in Arkansas like Mr.
Barron with petitioner’s type of practice for 1994, 1995, and
1996 would be $45,000, $47,500, and $49,000, respectively. In
view of the fact that petitioner had only reported compensation
paid to Mr. Barron for the fourth quarter of 1994 in the amount
of $2,000, respondent’s agent further proposed increases in
petitioner’s employment taxes, and additions to tax under section
6656 for failure to make deposit of taxes, for the calendar
quarters in, and the calendar years of, 1994, 1995, and 1996.
On February 20, 1998, petitioner executed Forms 2504
(Agreement to Assessment and Collection of Additional Tax and
Acceptance of Overassessment), agreeing to the immediate
assessment and collection of the increases in its employment
taxes and additions to tax under section 6656, as proposed by
respondent’s employment tax agent. On March 30, 1998, respondent
assessed these increases in petitioner’s employment taxes and
additions to tax.
F. Petitioner’s Offer in Compromise
On December 8, 1998, respondent received from petitioner
Form 656 (Offer in Compromise). The Offer in Compromise, which
was submitted by petitioner on the basis of doubt as to
liability, encompassed petitioner’s employment tax liabilities
for the calendar quarters in, and the calendar years of, 1994,
1995, and 1996.
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