Wiley L. Barron, CPA, Ltd. - Page 16




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               By virtue of the above-described waivers (Forms SS-10) and             
          Offer in Compromise (Form 656), respondent’s issuance of the                
          notice of determination on May 24, 1999, occurred before the                
          expiration of the period of limitations on assessment of                    
          petitioner’s employment taxes for periods ending in 1994 and                
          1995.  Accordingly, the statute of limitations does not bar                 
          assessment of employment taxes for those periods.                           
               Petitioner contends that the abatement on May 3, 1999, of              
          the employment tax assessment (see Background, supra, section G.)           
          served to annul the waiver provisions of the Offer in Compromise.           
          We disagree.  Petitioner in fact executed Form 656 and thereby              
          agreed to the suspension of the period of limitations with                  
          respect to the employment taxes that were subject to the offer.7            
               B. 1996                                                                
               The regular 3-year period of limitations for assessment of             
          employment taxes reportable on Form 941; i.e., FICA taxes, for              
          the calendar quarters ended March 31, June 30, September 30, and            
          December 31, 1996, expired on April 15, 2000.  The regular 3-year           


               7  At trial, petitioner introduced a document dated June 13,           
          2000, purporting to withdraw the Offer in Compromise previously             
          submitted in Dec. 1998.  In petitioner’s view, withdrawal of the            
          offer would serve to negate the waiver of the statute of                    
          limitations therein.  However, petitioner may not, by such simple           
          expedient, eliminate the consequences of its action in submitting           
          the offer.  More precisely, paragraph (m) of the offer                      
          specifically states that the offer remains pending “until an                
          authorized IRS official * * * acknowledges withdrawal of the                
          offer in writing.”                                                          





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