- 38 -
the disallowance of the Freijes' miscellaneous deductions was
error as a matter of law and accordingly an abuse of discretion.
The Appeals officer's verification that the requirements of
applicable law had been met was incorrect. The statement in the
notice of determination that the tax owed for 1999 "is from the
original return" is wrong; it overlooks the adjustments to the
return improperly claimed as math errors under section
6213(b)(1). Accordingly, the levy to collect the foregoing
portion of the 1999 assessment may not proceed.
Conclusion
Respondent has conceded that the determination to proceed
with the levy for 1997 should not be sustained, and that the
determination to proceed with the levy for 1998 failed to take
into account $4,094 in withholding credits. With respect to the
levies for 1998 and 1999, we have found that $6,500 in
remittances made by the Freijes in 1999 were unlawfully applied
to their 1997 account and should have been available to satisfy
liabilities for 1998 and/or 1999.27 Thus, the unpaid tax for
those years, upon which the levies are based, may not be correct.
Further, we have found that a portion of the 1999 assessment on
which the levy for 1999 is based is invalid.
27 If the $6,500 in 1999 remittances that was applied to the
1997 account is applied to the 1998 account, the result may be
that the $2,587 in 1999 remittances that was applied to 1998 may
be available to satisfy 1999 liabilities.
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