Donald and Yvonne Clayton - Page 2

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          1986.1  Petitioners argue that Appeals was required to accept               
          their offer of $100,000 to compromise what they estimate is their           
          approximately $275,000 Federal income tax liability for 1982                
          through 1996.2  We decide whether Appeals abused its discretion             
          in rejecting that offer.3  We hold it did not.                              
                                  FINDINGS OF FACT4                                   
               The parties filed with the Court stipulations of fact and              
          accompanying exhibits.  The stipulated facts are found                      
          accordingly.  When the petition was filed, petitioners resided in           
          Benton City, Washington.                                                    



               1 Unless otherwise indicated, section references are to the            
          applicable versions of the Internal Revenue Code.  Dollar amounts           
          are rounded.                                                                
               2 While the proposed levy related only to 1982 through 1986,           
          petitioners offered to compromise their liability for 1987                  
          through 1996 as well.                                                       
               3 Petitioners also dispute respondent’s determination that             
          they are liable for increased interest under sec. 6621(c).  This            
          interest relates to deficiencies attributable to “computational             
          adjustments”, see secs. 6230(a)(1) and 6231(a)(6), made following           
          the Court’s decision in Shorthorn Genetic Engg. 1982-2, Ltd. v.             
          Commissioner, T.C. Memo. 1996-515.  As to this dispute, the                 
          parties have agreed to be bound by a final decision in Ertz v.              
          Commissioner, docket No. 20336-04L, which involves a similar                
          issue.                                                                      
               4 Following a trial of this case, the Court ordered each               
          party to file an opening brief of no more than 25 pages.                    
          Petitioners filed a 25-page opening brief that attempts to                  
          circumvent the Court’s order by incorporating (1) lengthy                   
          arguments made in their 40-page pretrial memorandum and (2) 90              
          paragraphs of stipulated facts.  To the extent that an argument             
          or proposed finding of fact is not specifically set forth in                
          petitioners’ opening brief, we decline to consider it.                      




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