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liability and effective tax administration. On March 30, 2004, a
section 6330 telephone hearing was held between Settlement
Officer Linda Cochran (Ms. Cochran) and petitioner’s attorney,
during which petitioner’s attorney argued that: (1) Appeals
should accept the offer as a matter of equity and public policy;
(2) the collection activity should be limited to taxes owed for
1989 and 1991 until the Tax Court decides the pending interest
and penalty cases;5 and (3) petitioner did not have an
opportunity to be heard during the examination process.
On May 3, 2004, petitioner submitted to Ms. Cochran a
revised Form 656 dated March 24, 2004, with a revised completed
Form 433-A dated March 22, 2004, offering to pay $102,000 to
compromise a liability of approximately $230,000 for 1987-96.
Petitioner offered to compromise his outstanding tax liabilities
not only for the years subject to the proposed collection action,
but also for the liabilities arising from his 1987-88, 1990, and
1992-96 tax years.6 The revised offer-in-compromise was
5 On Apr. 28, 2005, a stipulated decision was entered in
McDonough v. Commissioner, docket. No. 18866-03, an interest
abatement proceeding for 1989 through 1991, in which the Court
ordered and decided that petitioner was not entitled to an
abatement of interest under sec. 6404(e) for those years. To
date, no decision has been made by the Court in McDonough v.
Commissioner, docket No. 15239-04.
6 At the time of the sec. 6330 hearing, the taxes,
penalties, and interest for 1987-88, 1990, and 1992-96 were
unassessed.
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