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Specifically, the record does not reflect that the $4,244.75
figure was ever represented as other than the “payoff” amount for
petitioner’s income tax liability, exclusive of penalties,
additions to tax, or interest. Each of the foregoing four items
appears to have been considered and treated independently by
respondent throughout the administrative process. At the
hearing, for instance, resolution of the tax liability by means
of a 25-percent reduction was discussed, while resolution of the
accuracy-related penalty focused on abatement in full. A
separate basis for settlement was thus proposed for the two items
broached at the conference.
Conversely, both a section 6651(a) addition to tax and
interest were assessed as of the date of the hearing, but neither
was addressed. Moreover, since these items are not penalties,
there exist no grounds for claiming that respondent represented
they would be abated in full. Likewise, because the $4,244.75
figure was computed by reducing petitioner’s $6,997 tax liability
(which amount did not include interest, etc.) by 25 percent and
then crediting 2001 refunds of $1,003, respondent by this
calculation would not have represented, and would in fact have
countered any notion, that the addition to tax or interest was
incorporated in the liabilities to be settled by the 75-percent
“payoff” amount.
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