John F. and Carolyn J. Joseph - Page 5

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          petitioners stated that they had a combined monthly income of               
          $8,924 and total expenses of $7,546.                                        
               On January 21 and February 26, 2004, the Appeals officer               
          spoke by telephone with petitioner concerning payment of                    
          petitioners’ outstanding tax liabilities.  Petitioner requested             
          that he be allowed to pay petitioners’ tax liability in monthly             
          installments of $700.                                                       
               The Appeals officer advised petitioner that she could not              
          consider an installment agreement calling for monthly payments of           
          $700 unless the balance due for all years was reduced to $25,000            
          or less.  Petitioner told the Appeals officer that he could not             
          pay the $4,000 required to reduce the balance to $25,000.  The              
          Appeals officer informed petitioner that since he could not bring           
          the balance to $25,000, any new installment agreement would                 
          require petitioners to pay monthly installments in an amount                
          equal to the amount of their available income after necessary               
          expenses.  The Appeals officer suggested that petitioners borrow            
          against the equity in their real property and/or other assets to            
          pay the balance in full.  Petitioner did not agree to the                   
          alternatives suggested by the Appeals officer.                              
               Petitioners did not raise any spousal defenses.                        
               The IRS Appeals Office issued a notice of determination                
          dated April 2, 2004, sustaining the proposed collection by levy.            







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