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Compromise of Tax Liabilities
Petitioner contends that the first call resulted in an
agreement under which he would be required to pay a total amount
that was less than he owed. We have found as a fact that he
believed that after making the payments for 36 months, he would
owe nothing more with respect to his tax liabilities.
Respondent contends that an installment agreement, not a
compromise, was made during the first call. Respondent contends
that, according to guidelines set forth in the Internal Revenue
Manual, amounts that were accrued but unassessed at the time of
the first call, such as interest and penalties, would not be
covered by the installment payments, and would remain due even
after all of the installment payments had been made.
It is well settled that section 7122 and the regulations
thereunder provide the exclusive method of effectuating a valid
compromise of assessed tax liabilities. Ringgold v.
Commissioner, T.C. Memo. 2003-199; see also Botany Worsted Mills
v. United States, 278 U.S. 282, 288-89 (1929); Laurins v.
Commissioner, 889 F.2d 910 (9th Cir. 1989), affg. Norman v.
Commissioner, T.C. Memo. 1987-265. After evaluating the
requirements of section 7122 and the regulations thereunder, we
find that petitioner and the ACS employee did not enter into a
binding agreement to compromise petitioners’ liabilities.
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