Newton K. and Kimberly A. McKoin - Page 5

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               .due will be applied to this liability until it is                     
               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.                           

               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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