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If your offer is less than the minimum offer
amount from item (5), we can’t process your offer. * * *
In November 1998, respondent advised petitioners that the
minimum acceptable offer to pay their remaining 1995 tax
liability was $22,837, payable in 24 monthly installments of
$951.55, not including interest. Under this payment plan,
petitioners would not have to borrow against or sell their
assets. Petitioners responded that they could not make the
monthly payments, and respondent withdrew the offer.
Petitioners sold their Mercedes between June 1997 and
October 1998, their one half interest in the jointly owned rental
property between June 1997 and November 1999, and their Jeep
between November 1998 and November 1999. They did not use the
proceeds of these sales to pay any of their 1995 tax liability.
In March 1999, petitioner borrowed $17,000 from his retirement
account to consolidate other debts but did not use any of the
loan proceeds to pay petitioners’ 1995 tax liability.
On June 1, 1999, respondent issued a Notice of Intent to
Levy and Notice of Your Right to a Hearing to petitioners. On
June 17, 1999, petitioners requested and were granted a hearing.
At the hearing, petitioners contended that reasonable cause
existed to abate the addition to tax for failure to pay tax and
interest. Petitioners requested that interest be abated because
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