Albert G. Cooper - Page 4

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               reflect any abatement of penalties that were assessed                  
               against the Debtor.  Consequently, all account balances                
               shown for each year commencing in 1989 through the year 1997           
               are incorrect.                                                         
               On January 23, 2002, the Appeals officer replied to                    
          petitioner’s January 14, 2002, letter.  The Appeals officer’s               
          letter stated:                                                              
                    You also stated that penalties discharged in                      
               bankruptcy were not credited.  I have consulted with                   
               one of the local Bankruptcy Specialists who has advised                
               me that the penalties in your client’s case were not                   
               dischargeable.  Taxes will not be dischargeable if the                 
               due date for a tax return is within 3 years of the                     
               bankruptcy petition date.  Also, when a case converts                  
               from Chapter 11 to Chapter 7, it carries the same                      
               original petition date.  Although, according to the                    
               dates in your letter, your client’s bankruptcy                         
               converted to Chapter 7 in 1996, the petition date for                  
               purposes of determining dischargeability goes back to                  
               the original filing in 1991.                                           
               Accordingly, my determination, at this time, would have                
               to be that the balances shown due are correct.  If I                   
               have misstated or misunderstood either the facts or the                
               law relating to some aspect of this matter, please                     
               correct me and provide a citation that supports your                   
               position.  I will certainly reconsider all of this if                  
               my analysis is not consistent with the facts and law.                  
               If you wish to explore payment options, I can assist                   
               you in that matter.  Options may include either an                     
               installment payment agreement, an offer in compromise                  
               or, possibly, a suspension of collection action pending                
               an improvement in your client’s financial situation.                   
               Form 656 is enclosed for your use and information.  In                 
               that booklet you will also find financial statements                   
               (Forms 433-A&B).  If anything other than a short-term                  
               payment plan is sought, your client will have to submit                
               the appropriate financial statement in support of the                  
               proposal they wish to make.                                            
               I am faxing this letter to you this morning.  The                      
               original will be in the mail along with the Form 656.                  





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