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Appeals Process
The Campbells received a proposed notice of deficiency (30-
day letter) dated March 5, 1990, proposing a deficiency in income
tax for the taxable year 1983 of $2,371,975 and additions to tax
aggregating $1,886,986. The Campbells timely protested this
proposed deficiency, and the case was sent to the Appeals Office.
On September 25, 1998, the Campbells executed Form 870-AD, Waiver
of Restrictions on Assessment and Collection of Deficiency in Tax
and Acceptance of Overassessment, for the 1983 tax year (the 1983
settlement). In the 1983 settlement, the Campbells consented to
the assessment and collection of a $598,826 deficiency (not
including interest). Further, the Campbells conceded that
$435,401 of the deficiency resulted from a tax-motivated
transaction. On December 29, 1998, the Campbells received a
notice of assessment of $2,804,014.43. Under the Form 870-AD,
petitioner was entitled to file a claim for innocent spouse
relief under section 6015. In May 2002, Mr. Campbell submitted
an offer-in-compromise with respect to the 1983 tax liability of
$100,000, which respondent eventually accepted on the grounds of
doubt as to collectibility. The Campbells paid the $100,000 by
stripping their retirement accounts and borrowing money from
petitioner’s mother.
On or around April 14, 1999, petitioner submitted a Form
8857, Request for Innocent Spouse Relief (And Separation of
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Last modified: May 25, 2011