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B. The Jeopardy Levy
On November 22, 2005, respondent levied upon the 1997
bankruptcy sale proceeds, and named Darren Drake and Gregory
Drake, Jr., as “nominees and/or transferees”. Respondent
notified petitioner of the jeopardy levy in a letter dated
November 28, 2005. In the letter, respondent made the following
contentions in support of the jeopardy levy:
(1) You did not answer a question about the transfer of
funds to your sons on the first financial statement
that you submitted during the CDP process. On a
subsequent financial statement you falsely answered the
question regarding a transfer of assets.
(2) You did not tell the Appeals Officer where the
funds were when requested to do so during the CDP
process.
(3) The funds were in the name of third parties and can
easily be dissipated.
(4) Even after we informed your representative that the
government was now fully aware of the facts involving
the money in the account, you submitted an offer in
compromise that your representative knew in advance
would be unacceptable.
On April 13, 2006, petitioner filed with the Court a “Motion
for Stay of Levy”, requesting that the Court order a stay of the
jeopardy levy on grounds that respondent made the jeopardy levy
in bad faith, for the purpose of advancing respondent’s
negotiating position in settlement discussions.
C. The Global Settlement Negotiations
During the section 6330 hearing on remand, the parties
engaged in negotiations to resolve the tax liabilities of both
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