Ronald J. and June M. Speltz - Page 6

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               liability in full within the time provided by law.  We                 
               have made this determination based on the following                    
               computations:                                                          
                    Total net equity in assets:     $77,948.00                        
                    Total future ability to pay                                       
          and retire debt:             $113,568.00                                    
                    Total ability to pay:          $191,516.00                        
                    Total balance due:             $148,744.64                        
                    Amount you offered:      $4,457.00                                
               Copies of our worksheets are enclosed for your review.                 
               Your options at this time are to pay your liability in                 
               full, enter into an installment agreement, withdraw                    
               your offer using the withdrawal letter previously                      
               provided or withhold your response and appeal your                     
               offer’s failure to gain acceptance through the appeal                  
               procedure that you will be offered.  Please advise of                  
               your preferred course of action.                                       
               Please respond within 14 days of the date of this                      
               letter.  If you fail to respond or if your response is                 
               egregiously inadequate, a Federal Tax Lien will be                     
               filed if one is not already a matter of record and the                 
               case will be forwarded to an independent reviewer                      
               without a recommendation for approval.  If the reviewer                
               concurs with the conclusion of my investigation, you                   
               will be notified by mail and advised of your appeal                    
               rights.  If there is a need for additional information                 
               you will be notified.                                                  
               On December 17, 2002, respondent sent to petitioners a                 
          Letter 3172, Notice of Federal Tax Lien Filing and Your Right to            
          a Hearing Under IRC 6320, with respect to their unpaid income tax           
          liability for 2000, advising that petitioners could request a               
          hearing with respondent’s Office of Appeals.  On January 13,                
          2003, petitioners submitted a Form 12153, Request for a                     
          Collection Due Process Hearing.  Petitioners stated that they               
          were disagreeing with the Notice of Federal Tax Lien because:               






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