Patrick M. Shannon - Page 7

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                    3.     See copy of your letter attached.[6]                       
                    4.     Tax years involved are 1999, 2000, 2001,                   
                           2002 and 2003.                                             
                    5.     I do not agree with your conclusion that we                
                           owe any money to you.  We did not owe when                 
                           we filed our 1999 return.  You owe us a                    
                           refund for 2000, 2001, 2002, and 2003.  Not                
                           to mention the $600.00 refund that we never                
                           received.  Amount owed us is approximately                 
                           $20,000.00!!!!!  Plus interest for four                    
                           (4) years * * * [Reproduced literally.]                    
               On or about September 15, 2004, an Appeals officer with                
          respondent’s Appeals Office (Appeals officer) sent petitioner a             
          letter.  That letter stated in pertinent part:                              
               In review of your protest and/or request for a hearing,                
               I find that the outstanding liabilities are from your                  
               own late filing of the 1999 return.  The first liabil-                 
               ity was established by the Service with some limited                   
               information after you defaulted your right to petition                 
               the Tax Court.  Thereafter, you submitted a return for                 
               1999 with a higher liability.                                          
               Since the due date of the return was April 15, 2000,                   
               you were assessed the failure to file penalty, the                     
               failure to pay penalty and interest.  As the Service                   
               took funds from other returns, adjustments were made to                
               the penalties and interest since some of the payments                  
               from other returns were not known until after the                      
               penalties and interest were assessed, but the effective                
               date of the refunds took effect earlier.                               
               * * * The total assessed balance is currently                          
               $18,309.15 since the Service took $2,236.51 levy funds                 
               on May 17, 2004.                                                       
                  *       *       *       *       *       *       *                   


               6Petitioner attached to his March 8, 2004 letter Form CP               
          504, “Urgent!!  We intend to levy on certain assets.  Please                
          respond NOW.” (Form CP 504).  The Internal Revenue Service (IRS)            
          had issued Form CP 504 to him with respect to petitioner’s unpaid           
          total 1999 liability.                                                       




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