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Secretary to enter into installment agreements with any taxpayer
"to satisfy liability for payment of any tax in installment
payments if the Secretary determines that such agreement will
facilitate collection of such liability." (Emphasis added.)
Similarly, the regulations under section 6159 authorize
designated personnel of the Commissioner to enter into an
installment agreement with a taxpayer "that allows the taxpayer
to satisfy a tax liability by making scheduled periodic payments
until the liability is fully paid". Sec. 301.6159-1(a), Proced.
& Admin. Regs. (emphasis added). Installment agreements
generally entail a finite term during which the subject liability
is paid in full, coupled with an agreement by the taxpayer to an
extension of the period of limitations on collection of that
liability. See sec. 301.6159-1(b)(1)(i)(A), (2), Proced. &
Admin. Regs. The notion that the Commissioner may apply an
installment payment to satisfy a liability other than that for
the period covered by the installment agreement contravenes the
statute and regulations governing such agreements.9 Respondent's
application of petitioners' payments under the 1993 installment
agreement to their 1991 and 1992, rather than 1993, liabilities
9 Although the Internal Revenue Manual states that all
outstanding liabilities of a taxpayer should be included in an
installment agreement, there is no evidence or suggestion in this
case that the 1993 installment agreement covered liabilities in
other years. To the contrary, the parties have stipulated that
the 1993 installment agreement was an agreement "to pay the 1993
income tax liabilities".
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Last modified: May 25, 2011