Johnny and M. Suzan Black - Page 4

          respect to the 1996 tax liability.  These payments continued                
          until July 2002.                                                            
          A.  Petitioners’ OIC                                                        
               On November 16, 2002, petitioners submitted an OIC to the              
          Internal Revenue Service (IRS) in which they offered to pay a               
          total of $5,000 over a period of 24 months.  The OIC related to             
          the 1996, 1997, 1999, 2000, and 2001 tax years.  The offer was              
          submitted on the basis of doubt as to collectibility.  Petitioner           
          Johnny Black (petitioner) explained in a written statement                  
          attached to the OIC that he was formerly an insurance agent with            
          Allstate Ins. Co.  As a result of expending personal funds to               
          support his agency, and decreases in company benefits, petitioner           
          left Allstate in 1999 with unpaid debts.  At the time of trial,             
          petitioner drove a bus for senior citizens and earned $9 per                
               Petitioner M. Suzan Black has been permanently disabled                
          since 1982.  She suffers from diabetes, had heart bypass surgery            
          in 1995, and has other serious medical issues.  She is unable to            
               By letter dated January 23, 2004, the IRS rejected                     
          petitioners’ OIC.  The basis for the rejection was that the                 
          amount offered was less than petitioners’ reasonable collection             
          potential.  The Asset/Equity Table, attached to the rejection               
          letter, reflected that petitioners’ assets included their house             

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