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issued a notice of deficiency for the tax year 1991 determining a
$7,363 income tax deficiency and penalties in the amounts of $367
and $1,473. Petitioner filed a timely petition with this Court
in connection with his 1991 tax return filed February 3, 1993,
and on October 18, 1995, an agreed decision was entered
reflecting a $2,717 income tax deficiency and no penalties or
additions to tax for petitioner’s 1991 tax year. On August 18,
1997, petitioner filed his 1996 income tax return showing a
balance due.
On August 21, 2001, respondent issued petitioner a Letter
1058, Final Notice--Notice of Intent to Levy and Notice of Your
Right to a Hearing, with respect to petitioner’s 1991 and 1996
outstanding income tax liabilities, which totaled $5,743.04,
including statutory additions. Petitioner requested a hearing,
and on January 24, 2002, a face-to-face hearing was held between
petitioner and respondent’s Appeals officer. On February 16,
2002, petitioner submitted Form 656, Offer in Compromise, along
with a Form 433-A, Collection Information Statement for Wage
Earners and Self-Employed Individuals, offering to pay $1,500 in
full payment of the outstanding liabilities.
At the time that petitioner offered $1,500 in full
settlement of more than $5,000 in liabilities, petitioner was
paying $500 per month on credit card debt. Subsequent to the
rejection of petitioner’s offer, petitioner was able to borrow
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