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liability pursuant to section 6015 for each of the years in
dispute. We discuss Barbara Drake’s request for section 6015
relief in greater detail below.
A. Proceedings Before Settlement Officer O’Shea
Settlement Officer Eugene O’Shea was assigned to conduct the
requested section 6330 hearing, and he determined from Internal
Revenue Service (IRS) records that petitioner had previously
filed for bankruptcy protection. On January 30, 2002, prior to
the section 6330 hearing, Settlement Officer O’Shea conferred
with Advisor Sid Gordon of the Internal Revenue Service
Insolvency Unit (Advisor Gordon) regarding the 1997 bankruptcy
and requested related documentation. On the same date, Advisor
Gordon faxed to Settlement Officer O’Shea a copy of Advisor
Gordon’s prior memorandum to respondent’s counsel Louise R.
Forbes (Attorney Forbes). In the memorandum, dated October 5,
1999, Advisor Gordon stated that the 1997 bankruptcy sale
proceeds had been distributed to Barbara Drake and petitioner,
that the proceeds should have been distributed to the creditors
of Barbara Drake and petitioner, and that Advisor Gordon believed
that Mr. Satran and petitioner had “used the Court to bypass the
Federal tax Lien.” The memorandum further stated:
According to the settlement sheets the debtor
received $161,094.73 from the three sales. Although
the Bankruptcy Court approved the sales under 11 USC
363 the IRS received nothing. Attorney Satran had
knowledge of the Internal Revenue Service Federal Tax
Liens due to the considerable litigation involved in
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