W. Richard and Janice J. Morgan - Page 4

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          in-compromise.  In May 1998, Cooper issued a wage levy to                   
          petitioner’s employer.                                                      
               On May 19, 1998, Cooper mailed to petitioners’ attorney a              
          letter regarding the submission of another offer-in-compromise              
          and establishing an installment agreement.  The letter also                 
          stated:  “regarding the 1983 [tax liability], Special Procedures            
          Branch is in the process of getting it abated”.  Cooper’s                   
          representation was based on her knowledge that the 1983 tax                 
          liability was discharged in bankruptcy, her lack of knowledge               
          that the pension plan was an exempt asset in the bankruptcy, and            
          her communications with the Special Procedures Branch that told             
          her that 1983 would be abated.                                              
               At the time of the installment agreement, Cooper believed              
          that there would be no levies and no collection for 1983.  An               
          installment agreement for 1981 and 1982 was executed by                     
          petitioners on May 27, 1998, and on behalf of respondent on                 
          June 4, 1998.  The amount owed under the installment agreement              
          was $499,710.73, and the agreement required payments of $1,000              
          per month.  There was no provision regarding 1983 in the                    
          installment agreement.                                                      
               The installment agreement was meant to be an interim                   
          situation until petitioners could submit another offer-in-                  
          compromise.  In June 1998, Cooper advised petitioners’ attorney             
          to have petitioners send money directly to her until 1983 could             

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