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the notice, and don’t dispute that they never filed a petition in
this Court to challenge it. Since the Baltics didn’t challenge
the deficiency, the Commissioner assessed it. The Baltics didn’t
pay and so, in June 2004, the Commissioner sent them a notice
under section 6320 that he had filed a federal tax lien against
their property, and a notice under section 6330 that he intended
to levy their property to collect the unpaid tax. The Baltics
promptly requested a collection due process (CDP) hearing. Their
request stated that “We disagree with the determination of taxes
and additions owed, and the calculations of the amounts, if any.”
Before the hearing was scheduled, they submitted an OIC-DATL that
covered not just 1999, but all tax years from 1997 through 2003,
offering $18,699 to compromise their entire income tax liability
for all those years. They also submitted amended tax returns for
1997-19992 and 2003, and original tax returns for the years 2000-
2002.3
2 As with the Baltics’ 1999 tax year, the Commissioner had
already assessed deficiencies for the Baltics’ 1997 and 1998 tax
years after they failed to respond to a notice of deficiency for
those years.
3 The Baltics enclosed a cashier’s check for the proposed
settlement amount with their OIC-DATL, noting on it that cashing
the check meant acceptance of the OIC. This is not how the IRS
does business. An OIC is accepted only when the taxpayer is
notified in writing. Sec. 301.7122-1(e)(1), Proced. & Admin.
Regs. Cashing a check does not mean that the IRS has accepted
the offer. Colebank v. Commissioner, T.C. Memo. 1977-46; Howard
v. Commissioner, T.C. Memo. 1956-219. The Commissioner took the
check and applied it to the 1998 tax debt that the Baltics owed
(continued...)
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Last modified: March 27, 2008