Arthur A. Lemann III and Roberta A. Lemann - Page 10

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          proposed installment agreement by June 20, 2002, would result in            
          the issuance of a determination letter sustaining the proposed              
               On June 18, 2002, Mr. Lemann sent a letter to the Appeals              
          officer acknowledging and rejecting the proposed installment                
          agreement.  The letter read: "I simply cannot afford the payments           
          you propose."  The letter offered no further collection                     
          alternatives to the levy.                                                   
               On July 16, 2002, a Notice of Determination was issued to              
          petitioners which determined that the proposed levy was                     
          appropriate.  The determination concluded:  (1) That all                    
          requirements of applicable law and administrative procedures had            
          been met; (2) that petitioners' proposed collection alternative             
          of monthly installment payments of $1,500 was not acceptable                
          because it would not result in full payment of the outstanding              
          tax liabilities within the applicable periods of limitation on              
          collection; (3) that petitioners' $67,000 offer-in-compromise               
          based on doubt as to collectibility was unacceptable given that             
          their net equity in assets and future income were sufficient to             
          pay their outstanding tax liabilities in full;8 and (4) that, in            
          light of petitioners' refusal to accept the installment agreement           

               8 The Appeals officer's case memorandum indicates that he,             
          like the offer specialist, reached his conclusions regarding                
          petitioners' ability to pay without relying on petitioners'                 
          interests in any family corporations or in the B. Lemann                    

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