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In their protest Taxpayer stated that they did not
agree with the lien filing because they were never
given a Tax Court hearing in Mobile, AL as they had
requested in a timely filed petition. Taxpayer
provided a copy of the petition that was mailed to the
Tax Court. In their petition Taxpayer had disagreed
with the audit adjustment to disallow the cost of good
sold in its entirety. It was decided to give the
Taxpayer the benefit of a doubt and consider the cost
of good sold issue. Taxpayer provided documentation to
substantiate material cost of $31,365.45. The SND was
revised to reflect the allowance of the COGS. This
adjustment reduces the amount of tax owed for 1997 from
$24,773 to $12,478 and the penalty associated with the
adjustment to be abated is $4,234.
Taxpayer was told of the recommendation to reduce
the liability for 1997. Taxpayer-wife had stated
several times that she was going to try and borrow some
money to pay part of the liability and set the balance
on payments. A copy of the revised audit report was
mailed to Taxpayer along with the Form 12257.
Taxpayer-wife called to discuss the form and was given
two weeks to sign and return the waiver or a
determination letter would be issued.
From the best information available it appears
that all required legal procedures were followed by the
Internal Revenue Service in issuing the Notice of
Federal Tax Lien and advising Taxpayer of their Appeal
right. Taxpayer had raised the liability issue for one
year, which was considered. The Notice of Federal Tax
Lien should not be withdrawn. The lien was properly
file to secure the Government’s priority position.
This action balances the need for the efficient
collection of taxes with the legitimate concern that
any collection action be no more intrusive than
necessary. [Reproduced literally.]
On March 29, 2002, petitioners filed with this Court a
petition that on its face challenges the “Notice of Determination
- 2/28/02” with respect to the year “1997”. Attached to the
petition is an explanation of petitioners’ position which
mentions once again the lack of a Tax Court proceeding in
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