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previous installment plan, because information submitted by
petitioner showed monthly expenses in excess of income, and
because the suggested monthly payments would be insufficient to
pay her liabilities within the statute of limitations for
collection. After petitioner received this letter, her
representative apparently contacted respondent by telephone and
discussed possible use of an offer in compromise. Respondent
then sent a letter dated May 1, 2001, confirming the telephone
conversation and requesting completion of the enclosed Form 656,
Offer in Compromise, and Form 433-A, Collection Information
Statement for Wage Earners and Self-Employed Individuals.
Respondent received the Form 656 and Form 433-A submitted by
petitioner on September 4, 2001. The Form 656 asked petitioner
to select as the reason for the offer either doubt as to
liability, doubt as to collectibility, or effective tax
administration. Petitioner checked effective tax administration,
which the form explained as meaning “I owe this amount and have
sufficient assets to pay the full amount, but due to my
exceptional circumstances, requiring full payment would cause an
economic hardship or would be unfair or inequitable.” Petitioner
proposed to pay a total of $2,400 by remitting $240 for the first
month and $180 per month for each of the next 12 months. The
Form 656 indicated that the source of the funds would be the “Amy
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Last modified: May 25, 2011