Estate of Carol Andrews, Deceased, Robert Andrews, Special Administrator, and Robert Andrews - Page 9

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          and had to take several medications; (2) due to her heart                   
          condition, Mrs. Andrews was forced to retire in March 2004; (3)             
          Mr. Andrews suffered from depression and skin cancer; and (4) due           
          to his health, Mr. Andrews expected to retire at 65 years old.              
          The retirement analysis outlined the likelihood of increased                
          housing and medical costs as petitioners aged.  Petitioners also            
          noted that Mr. Andrews had an innocent spouse case pending before           
          the Tax Court at docket No. 19705-02.                                       
               In the remaining three letters, petitioners alleged that               
          they were victims of Hoyt’s fraud and asserted various arguments            
          regarding the appropriateness of an offer-in-compromise.                    
               On May 21, 2004, petitioners submitted another letter to Ms.           
          Cochran, which included 42 exhibits not provided with the                   
          previous letters.                                                           
               On August 25, 2004, respondent issued petitioners a notice             
          of determination.  In evaluating petitioners’ offer-in-                     
          compromise, respondent made the following changes to the values             
          of assets petitioners reported on the Form 433-A:  (1) Respondent           
          determined that the value of the section 401(k) plan account was            
          $153,499 instead of $107,449 (the 70-percent value reported by              
          petitioners) and reduced petitioners’ net realizable equity by              
          $35,700 to $117,799 to reflect estimated tax and penalties; and             
          (2) respondent determined that the house was worth $350,000                 
          instead of $200,000 and reduced petitioners’ net realizable                 

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