Stanley R. Harbaugh and Bonnie L. Harbaugh - Page 4

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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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