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alternatives. Petitioners were thereafter accorded an Appeals
hearing by telephone. In that hearing, petitioners took the
position that the IRS had applied the proceeds of the mortgage
indebtedness identified in petitioners’ bankruptcy petition to
the 1988 deficiency, and that application, combined with the
periodic payments and applied overpayments, should have resulted
in an overpayment of petitioners’ tax liabilities for all the
years in question.
A notice of determination was issued to petitioners in
January 2003 concluding “the information provided does not
warrant the abatement of any part of the tax liabilities.” With
respect to the possibility of collection alternatives, the notice
of determination stated that such relief was not available
because petitioners had not filed an income tax return for the
year 2001, nor were petitioners “making any estimated payments”.
Petitioners filed a timely petition in this Court appealing the
Appeals Office determination.
The Court must decide whether petitioners are entitled to
any relief from the Appeals Office determination. Where the
underlying tax liability is properly at issue in the hearing, we
review that issue on a de novo basis. Goza v. Commissioner, 114
T.C. 176, 181-182 (2000). However, where the underlying tax
liability is not at issue, as in this case, this Court reviews
the determination to see whether there has been an abuse of
discretion. Sego v. Commissioner, 114 T.C. 604 (2000). An abuse
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