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Petitioners were unable to pay their tax liabilities in August
1996. Petitioner and the ACS employee agreed during the first
call that petitioners would pay $225 per month to the IRS for 36
months, for a total amount paid of $8,100. The agreement between
petitioner and the ACS employee was not put in writing. At the
end of the first call, petitioner believed that, if he timely
made all 36 payments and did not become delinquent with any of
his other tax liabilities, his 1993, 1994, and 1995 income tax
liabilities and the TFRP would be extinguished, including any
interest and penalties thereon.
The first monthly statement reflecting a payment due
pursuant to the installment agreement was dated December 11,
1996. The statement showed balances of petitioners’ liabilities
that were inconsistent with petitioner’s belief about what he
owed as a result of the first call. Shortly after receiving the
statement, petitioner called the IRS in response to this
statement and again spoke with the ACS employee, “Miss Morrison”
(the second call). Petitioner was told during the second call
that the statement was a reminder of his payment due date, and
that the old liabilities would be reflected on his statements in
case of default. He was also told that at the end of the 36
months the additional amounts would be removed. Petitioners made
their December 1996 payment on December 22, 1996. At the time of
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