Louis A. and Christine Cox - Page 8

                                        - 8 -                                         
          expenses of $14,648.  The expenses included housing and utility             
          costs of $7,081, attributable to multiple mortgages                         
          overencumbering petitioners’ residence (valued at $900,000 in the           
          Form 433-A), and life insurance costs of $2,959.  The cover                 
          letter explained that the home secured indebtedness obtained to             
          finance petitioners’ business activities and that the life                  
          insurance on Mr. Cox’s life was a condition for such financing.             
          The Form 433-B incorporated an attached profit and loss statement           
          for January through July of 2003 showing total income of $139,261           
          and expenses of $137,361.10, resulting in net income of                     
          $1,899.90.                                                                  
               Mr. Skidmore reviewed the information submitted and                    
          documented his analysis in extensive notes.  By a letter dated              
          October 31, 2003, he communicated to petitioners his preliminary            
          conclusions and underlying concerns with respect to current                 
          compliance, to claimed expenses and his inability to reconcile              
          amounts on the Forms 433 with bank and financial statements                 
          provided, and to collection alternatives.  Mr. Planegger spoke              
          with Mr. Skidmore by telephone on November 10, 2003, and                    
          requested to have until the end of the month to prepare a                   
          response to the letter.  Mr. Skidmore indicated that with the               
          delays to date he was inclined to proceed but would look at                 
          anything received while the case was still in his hands.                    







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