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reasonable amount of proceeds and, thus, would result in undue
hardship.
II. Notice of Assessment and Demand for Payment
On June 1, 1998, respondent assessed the reported $1,730,845
estate tax liability, interest of $12,181, and a $17,308 section
6651(a)(2) addition to tax for failure to timely pay (addition to
tax). That day respondent sent the estate the notice of
assessment and demand for payment (notice and demand), which
included an explanation of the addition to tax and the procedure
to request relief.
III. Denial of Extension Request
On October 9, 1998, respondent denied the extension request
because:
A discretionary extension of time to pay for reasonable
cause under section 6161(a)(1) may not exceed 12 months
and under 6161(a)(2) may not exceed 10 years; therefore
you have to apply one year at a time & establish why
the executor can not full[y] pay the estate tax due.
There are sufficient estate assets (and partnership
assets) that the heirs can borrow against to satisfy
the Federal estate tax liability.
On October 19, 1998, the estate appealed the denial. On
December 8, 1998, and January 5, 1999, by teleconference, the
Appeals officer and the estate’s attorneys discussed the appeal.
On December 8, 1998, the estate’s attorneys provided copies of a
loan application rejection from the executor’s bank and, on
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