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1998, March 31, 1999, June 30, 1999, September 30, 1999, and
December 31, 1999. Petitioner’s principal place of business was
located in Philadelphia, Pennsylvania, when its petition in this
case was filed.
In September 2000, petitioner discovered that its employment
taxes for the periods in issue had not been paid to the Internal
Revenue Service (the Service) due to an embezzlement. Upon
discovering the embezzlement, petitioner and/or its principal,
Michael B. L. Hepps, entered into an agreement (installment
agreement) with the Service to make periodic payments on the
outstanding employment tax liability. The periodic payments were
derived from, and depended upon, payments petitioner or
petitioner’s principal received monthly from a third party, and
the Service was aware of this fact.2
On some date after the installment agreement was
implemented, the Service levied upon the third party, who
allegedly owed money to petitioner or petitioner’s principal.
Petitioner contends that the seizure was made in violation of an
understanding it had with the Service. The seizure resulted in
the third party, whose payments were funding the installment
agreement, terminating its relationship with petitioner and/or
petitioner’s principal. As a result, petitioner was no longer
2The record is unclear as to whether the third party was
obligated to pay petitioner or petitioner’s principal.
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