Donald and Yvonne Clayton - Page 4

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          counsel.5  Cochran and petitioners’ counsel discussed two issues.           
          The first issue concerned petitioners’ intent to offer to                   
          compromise their 1982 through 1996 Federal income tax liability             
          to promote effective tax administration.  Petitioners contended             
          that Appeals should accept their offer as a matter of economic              
          hardship, equity, and public policy.  Petitioners stated that it            
          took a long time to resolve the Hoyt partnership cases and noted            
          that Hoyt had been convicted on the criminal charges.  The second           
          issue concerned an interest abatement case under section 6404(e)            
          that petitioners had pending in this Court.  That case related to           
          the same years at issue here.  Petitioners claimed that the                 
          proposed levy should be rejected because that case was pending.             
               On June 7, 2005, petitioners tendered to Cochran on Form               
          656, Offer in Compromise, a written offer to pay $100,000 to                
          compromise their estimated approximately $275,000 liability.  The           
          offer was limited to a claim of effective tax administration                
          because petitioners had sufficient assets to pay the liability in           
          full.  Petitioners supplemented their offer with a completed Form           
          433-A, Collection Information Statement for Wage Earners and                
          Self-Employed Individuals, four letters totaling approximately 75           
          pages, and volumes of documents.  The Form 433-A reported that              




               5 Petitioners were 69 and 72 years old at the time of the              
          hearing.                                                                    




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