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Collection Actions
Although petitioners paid $27,000 when respondent accepted
the OIC, petitioners did not make any further payment under the
terms of the OIC; namely the $5,000 payment due on September 27,
1997. The record indicates that the $27,000 paid was applied to
amount of the OIC total attributable to taxable year 1993. This
application resulted in the settlement of the 1993 taxable year.
However, because petitioners did not remit the remainder of the
OIC amount, a liability for taxable year 1994 remained.
On October 6, 1997, respondent sent petitioners a letter
that applied interest on the unpaid portion of their income tax
liability stemming from taxable year 1994. On May 4, 1998,
respondent assessed a deficiency of $12,525.27 for taxable year
1994.
As previously discussed, petitioners did not timely file,
timely pay, and/or fully report their income for taxable years
1997, 1998, 1999, 2000, and 2001. Although respondent’s
Collections personnel were in contact with petitioners regarding
their outstanding liabilities for these years, the personnel did
not revisit the unpaid portion of the 1994 assessment until early
2001.
On May 1, 2001, and August 31, 2002, respectively,
respondent sent petitioners letters warning them that if they did
not become compliant with the unpaid liability for taxable year
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Last modified: May 25, 2011