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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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