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.due will be applied to this liability until it is
satisfied.
If the Conditions of this Installment Agreement are not
met, it will be terminated and the entire tax liability
may be collected by levy on income, bank accounts, or
any other assets, or by seizure of property.
OPINION
Petitioner concedes that there is a deficiency in his income
tax for 1997 as determined by respondent in the notice of
deficiency. However, petitioner contends that he does not owe
the deficiency because he previously paid it. In this regard,
petitioner relies on language in the Installment Agreement that
obligates him to pay 20 percent of his monthly gross receipts to
respondent “to be applied to current year’s estimated tax.”
Petitioner construes this language to mean that current year
payments made pursuant to the Installment Agreement are allocable
to current year tax liability, regardless of when such liability
may ultimately be determined, and only then may any excess be
applied to an outstanding liability for some other year.
We disagree with petitioner’s interpretation of the
Installment Agreement. In our view, petitioner’s interpretation
is strained, if not unreasonable, and subverts the statutorily
established estimated tax payment procedure.
The Installment Agreement expressly requires that “All
Federal taxes that become due during the term of this agreement
must be paid on time.” Towards that end, the agreement obligates
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