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With respect to the issue of notice before filing of the
Federal Tax Lien, the Internal Revenue Manual, sec. 5.12.1.3,
provides that reasonable efforts be made to contact the taxpayer
before filing. However, there are no specific requirements
provided in the Manual, or under the law, that the Commissioner
must send a warning default letter when the taxpayers have not
complied with the terms of an underlying OIC.
In this case, respondent sent petitioners two letters
warning them of default on the OIC for the taxable year 1994.
Petitioners testified that they had not received either of the
two default warning letters sent by respondent on May 1, 2001,
and August 31, 2002, or the letter of default dated February 7,
2003. All three letters were sent to petitioners’ address in Egg
Harbor City, New Jersey, and petitioners moved to the Egg Harbor
City, New Jersey, address in May 2000. Petitioners testified
that the first time they became aware that they had defaulted on
the OIC was when respondent issued them a Notice of Federal Tax
Lien on April 29, 2004.
When questioned by the Court, petitioners admitted that
there were “warnings” that they had defaulted on the OIC. We
find that based on the OIC Case history, the “warnings” received
by petitioners included both the aforementioned letters and phone
conversations. Moreover, we find that petitioners not only had
warning and notice of their default through three letters and
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