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the income tax liabilities for the years in issue. Respondent
sent petitioners a letter confirming the installment agreement,
which was silent as to whether petitioners could designate the
payments to a certain year’s liabilities under the agreement.
On August 12, 1996, petitioners sent respondent a payment
under the installment agreement for $1,000 and stated in an
attached letter:
The Installment Payment for August, please apply it to
1993/[sic]
The 1989 & 1984 assessments are disputed, because we owed 0
for 1989.
The 1984 taxes known as 6672, have no explanation of what
they [are] from the Internal Revenue.
WE have written for on [sic] explanation.
On September 26, 1996, respondent sent petitioners a response
(the September 26, 1996, letter) stating: “Since payments are
applied in the best interest of the government, we are unable to
transfer your $1,000 payment, dated August 12, 1996 as
requested.” After receipt of this letter, petitioners no longer
designated each payment under the installment agreement.
Petitioners made payments of $1,000 under the installment
agreement monthly from September 26, 1996, to March 1, 1998.
Respondent requested in each monthly payment notice attached to
the payment voucher that petitioners include the payment voucher,
which referred to “CIVPEN 06-30-84”, with each payment and write
on each check “CIVPEN 06-30-84". Although petitioners refused to
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Last modified: May 25, 2011