W. Richard and Janice J. Morgan - Page 5




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          be abated and the installment agreement could be entered into the           
          computer records.  By entering into the installment agreement,              
          petitioners were able to secure release of the wage levy.                   
          Petitioners have continued to make payments of $1,000 per month             
          under the installment agreement.                                            
               During the summer of 1998, Cooper continued to have                    
          discussions with the Special Procedures Branch concerning the               
          abatement of the 1983 tax liability and the pension plan.  On               
          August 17, 1998, Special Procedures instructed Cooper to obtain             
          additional information regarding the pension plan.  On                      
          September 11, 1998, petitioners’ attorney forwarded the pension             
          plan information and an attached letter to Cooper.  The letter              
          from petitioners’ attorney explained his understanding of the               
          effect of the installment agreement, which was that the IRS would           
          not commence additional collection procedures so long as the                
          Morgans complied with the terms of the installment agreement.               
               Petitioners were sent a Final Notice of Intent to Levy and             
          Notice of Your Right to a Hearing on December 27, 1999.  The                
          taxes owed with penalties and interest, as set forth in the final           
          notice, were $360,629.03, $309,937.93, and $379,581.83, for 1981,           
          1982, and 1983, respectively.  Petitioners filed a Request for a            
          Collection Due Process Hearing on January 26, 2000.  The hearing            
          was held in or about September 2000.  At the hearing, petitioners           
          argued that the 1983 tax was discharged in bankruptcy and that              






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