Kenneth Hawkins - Page 3

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          Petitioner did not petition this Court to redetermine any of the            
          tax liabilities, and the underlying tax liabilities are not in              
          dispute.                                                                    
               Petitioner married during 1997, and on February 10, 1997, he           
          and his wife purchased a residence as tenants by the entireties.            
          Petitioner contributed $50,000, or one-half of the downpayment.             
               Between October 25, 1994, and December 2, 1997, respondent             
          assessed tax and additions to tax against petitioner for 1993,              
          1995, and 1996, based on audit examinations and amounts shown as            
          due on income tax returns.  On December 3, 1997, petitioner sent            
          respondent a Form 656, Offer-in-Compromise (first offer), based             
          on doubt as to collectibility for the subject years, offering to            
          settle the total outstanding tax liabilities for $16,209.  At               
          that time, petitioner’s outstanding and unpaid tax liability was            
          $26,266.06.  Petitioner on Form 433-A, Collection Information               
          Statement for Individuals, claimed that he had a 50-percent                 
          interest in his home and monthly net business income and living             
          expenses of $1,400 and $1,648, respectively.  On February 13,               
          2001, respondent sent petitioner a notice rejecting petitioner’s            
          first offer, stating that the amount owed was legally due and               
          appeared to be collectible.                                                 
               On September 5, 2001, petitioner submitted a second offer-             
          in-compromise (second offer) for the subject years, this time for           
          $2,200.  In the second offer, petitioner’s only reference to his            






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