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were assessed against petitioner for 1989 and 1991 because of the
underreporting.4
On August 23, 2002, respondent mailed petitioner a Letter L-
1058, Final Notice of Intent to Levy and Notice of Your Right to
a Hearing. The notice informed petitioner that respondent
proposed to levy on his property to collect Federal income taxes
owed for 1989 and 1991. The notice advised petitioner he was
entitled to a hearing with respondent’s Appeals Office to review
the propriety of the proposed levy. On August 29, 2002,
petitioner submitted a Form 12153, Request for a Collection Due
Process Hearing. Petitioner indicated he would pursue an offer-
in-compromise based on effective tax administration and would
provide financial information upon request.
On March 11, 2003, Appeals received petitioner’s original
Form 656, Offer in Compromise, with a completed Form 433-A,
Collection Information Statement for Wage Earners and Self-
Employed Individuals, offering to pay $102,000 to compromise his
outstanding tax liability. Petitioner offered to compromise his
outstanding 1985-95 tax liabilities on the grounds of doubt as to
4 TBS 1989-1, one of the partnerships in which petitioner
invested, was involved in a consolidated case decided by this
Court in Durham Farms #1, J.V. v. Commissioner, T.C. Memo. 2000-
159, affd. 59 Fed. Appx. 952 (9th Cir. 2003). As a result of
that case, computational adjustments were made, and, on May 13,
2002, additional income tax and interest were assessed against
petitioner for 1989 and 1991.
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