Jerome J. Norris - Page 8

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               Respondent, on the other hand, presented no evidence                   
          concerning the calculation or timing of the disputed penalties              
          and interest.  The only evidence respondent offered was an                  
          abbreviated statement that had been sent to petitioner that                 
          reflected an amount of interest and penalties without any                   
          specific underlying assessment data.  This document is not a                
          statement of account and appears to be an unofficial document.              
          Although respondent is correct that interest and penalties would            
          normally accrue on petitioner’s $25,044 unpaid tax liability,               
          petitioner’s agreed payments were set at a total of $26,696,                
          indicating that the agreed payments did include penalties and/or            
          interest.  Respondent presented no evidence showing that                    
          penalties and interest accrued in excess of the amount petitioner           
          paid.                                                                       
               Petitioner’s credible testimony coupled with respondent’s              
          own records concerning the agreed payment arrangement thus                  
          constitutes sufficient evidence to challenge respondent’s                   
          determination.  Respondent, however, has not presented any                  
          evidence to refute petitioner’s testimony or to support the                 
          amounts in dispute.  Petitioner has thus met his burden of                  
          showing that the disputed amounts are in error, and respondent              
          has not met his burden of showing that it was appropriate to                
          impose the penalties in dispute.  Accordingly, we hold that it              
          was an abuse of discretion to proceed with collection activities.           






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