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Arkansas law adopts this analysis. See TXO Prod. Corp. v. Page
Farms, Inc., supra; see also DHC Resort, LLC v. Razorback
Entertainment Corp., 329 F.3d 974, 976 (8th Cir. 2003) (citing
TXO Prod. Corp. v. Page Farms, Inc., supra, and section 241 of 1
Restatement, Contracts 2d when applying Arkansas law). The
standard of materiality “is to be applied in the light of the
facts of each case in such a way as to further the purpose of
securing for each party his expectation of an exchange of
performances.” 1 Restatement, supra, sec. 241, comment a.
Cases in which courts have found offers in compromise
materially breached, and thus in default, generally involve
taxpayers who either fail to make payments agreed to in the
offer-in-compromise to pay off the amount compromised, or fail to
pay taxes owed during the 5-year period after the offer has been
accepted. See United States v. Feinberg, 372 F.2d 352, 356 (3d
Cir. 1965) (decedent’s installment payments of less than the
amount due and estate’s complete failure to make payments on
offer constituted material breach of offer-in-compromise); United
States v. Lane, 303 F.2d 1, 3-4 (5th Cir. 1962) (taxpayer’s
failure to comply with terms of collateral agreement by refusing
to file annual statements and pay additional money constituted
breach of offer-in-compromise); Roberts v. United States, 225 F.
Supp. 2d 1138, 1148 (E.D. Mo. 2001) (taxpayer’s delay in paying
his 1995 tax liability of $246,354 was a material breach of the
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