Simon L. and Patricia M. Richard - Page 13

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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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