Arthur W. & Rita C. Miller - Page 6

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          officer discussed the exercise by petitioners of certain incen-             
          tive stock options (ISO) and the effect of the alternative                  
          minimum tax (AMT) on the tax consequences with respect to such              
          exercise.  During the May 24, 2005 conference, petitioners agreed           
          that they owe the tax due shown in (1) petitioners’ 2000 return             
          as amended by petitioners’ amended 2000 return and (2) their 2001           
          return.  However, petitioners claimed at that conference that the           
          AMT is unfair and that they are entitled to certain carryforward            
          credits.  During the May 24, 2005 telephonic conference, the                
          settlement officer discussed collection alternatives with peti-             
          tioners and concluded that they had the ability to pay in full              
          from retirement and other assets petitioners’ unpaid 2000 liabil-           
          ity and petitioners’ unpaid 2001 liability.  During that confer-            
          ence, petitioners advised the settlement officer that they did              
          not wish to submit another offer-in-compromise since respondent             
          had rejected the one that they had previously submitted in                  
          response to the respective notices of intent to levy that they              
          received with respect to their taxable years 2000 and 2001.                 
          Petitioners further indicated to the settlement officer during              
          the May 24, 2005 telephonic conference that they did not wish to            
          propose an installment agreement.  The settlement officer told              
          petitioners during that conference that she intended to research            
          recent court cases addressing petitioners’ claim that the AMT is            
          unfair and that they are entitled to certain carryforward cred-             






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