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petitioners’ account if they failed to contact Discover.
Petitioners made no further attempts to contact Discover.
Although Discover continued to send petitioners monthly
statements through May or June 1999, which presumably contained
language stating that petitioners’ account was past due and
demanded payment, Discover did not contact petitioners concerning
their dispute. Moreover, petitioners did not receive any
additional collection letters after December 1998, and Discover
did not issue a new card when Mr. De Shon’s card expired in May
1999. The evidence in the record demonstrates that because
petitioners received no further communication from Discover after
mid-1999, it is reasonable to assume that petitioners’ account
was written off as a practical matter at that time. Taking into
account all the facts and circumstances, the fact that Discover
may not have removed petitioners’ debt from their books until
2001 because of a faint possibility of collecting the debt does
not establish that the discharge occurred in 2001. See Exch.
Sec. Bank v. United States, 492 F.2d 1096, 1099 (5th Cir. 1974)
(settlement agreement fixed the time when cancellation of debt
occurred, not when the debt was removed from the company’s
books); Bear Manufacturing Co. v. United States, 430 F.2d 152,
154 (7th Cir. 1970) (as a practical matter, income is realized
when the liability terminates); Fidelity-Philadelphia Trust Co.
v. Commissioner, 23 T.C. 527, 530 (1954) (“The important
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