Paul Thomas Demos - Page 6

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         Due Process Hearing (CDP hearing request).  Respondent                       
         temporarily lost the CDP hearing request.                                    
              On January 17, 2001, petitioner submitted a Form 656, Offer             
         in Compromise (OIC).  Petitioner offered $1,300 in satisfaction              
         of the balance due for the tax years in question.2  Petitioner’s             
         wife did not sign the initial OIC.  Respondent rejected the OIC              
         because petitioner failed to respond to a letter requesting                  
         additional documentation.  Petitioner did not execute a new OIC              
         that included both his and his wife’s signatures.  Respondent                
         closed the OIC file on May 15, 2002.                                         
              In April 2001, a portion of petitioner’s overpayment for tax            
         year 2000 was applied to the underpayment for the 1995 tax year.             
         The liability was paid in full, and on May 18, 2001, the Federal             
         tax lien for 1995 was released.  In August 2001, the remainder of            
         petitioner’s overpayment for tax year 2000 was applied to the                
         underpayment for the 1996 tax year.  Petitioner does not dispute             
         the propriety of the offsets to the years in issue.                          




               2  Petitioner’s tax liability for the years in question as             
          of Dec. 7, 2000:                                                            
                         Form      Tax Year       Balance Due                         
                         1040      1995           $  433.68                           
                         1040      1996           1,623.18                            
                         1040      1997           3,728.66                            
                         1040      1998           3,954.03                            






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