Stanley R. Harbaugh and Bonnie L. Harbaugh - Page 6

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          of $895.84 with respect to the TFRP.5  On April 17, 2001, the               
          claim for refund was denied by the IRS.  On April 23, 2001,                 
          petitioners filed additional Forms 843 with respect to their                
          income taxes for 1993, 1994, and 1995.  The Forms 843 were                  
          treated as requests for abatement of interest on petitioners’               
          income taxes.  On May 3, 2001, respondent denied petitioners’               
          claims for interest abatement for 1993, 1994, and 1995.  On May             
          30, 2001, petitioners requested review by the IRS Appeals Office            
          of the denial of interest abatement.  On December 19, 2001, the             
          IRS Appeals officer sent a final determination letter denying               
          petitioners’ claim for interest abatement for 1993, 1994, and               
               As a preliminary matter, we must decide whether an agreement           
          to compromise petitioners’ liabilities was reached between                  
          petitioner and the ACS employee.  If we find that a valid                   
          compromise existed, then it appears that petitioners’ liabilities           
          should have been extinguished upon their final payment on July              
          22, 1999.  If we find that no compromise existed, we must decide            
          whether respondent abused his discretion in refusing to abate               
          interest on petitioners’ income tax liabilities.                            

               5 The $895.84 represented the portion of the July 22, 1999,            
          payment that exceeded the $450 that petitioners’ 35th and 36th              
          installment payments would have totaled.                                    

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