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Appeals (Appeals) sustaining a proposed levy relating to $541,620
of Federal income taxes (inclusive of additions to tax,
penalties, and interest) owed by petitioners for 1981 through
1991.2 Petitioners argue that Appeals was required to accept
their offer of $35,000 to compromise what they estimate is their
approximately $575,000 Federal income tax liability for 1981
through 1998.3 We decide whether Appeals abused its discretion
in rejecting that offer.4 We hold it did not.
FINDINGS OF FACT
The parties filed with the Court stipulations of fact and
accompanying exhibits. The stipulated facts are found
accordingly. When the petition was filed, petitioners resided in
Mattawa, Washington.
2 Unless otherwise indicated, section references are to the
applicable versions of the Internal Revenue Code. Dollar amounts
are rounded.
3 Petitioners submitted to respondent Form 656, Offer in
Compromise, indicating that they were offering to compromise
their tax liability for 1981 through 1996. However, petitioners
also submitted to respondent a letter accompanying the Form 656
in which they stated that they wished to compromise their tax
liability for 1981 through 1998. We read petitioners’ offer to
include the years 1981 through 1998.
4 Petitioners also dispute respondent’s determination that
they are liable for increased interest under sec. 6621(c). This
interest relates to deficiencies attributable to “computational
adjustments”, see secs. 6230(a)(1) and 6231(a)(6), made following
the Court’s decision in Shorthorn Genetic Engg. 1982-2, Ltd. v.
Commissioner, T.C. Memo. 1996-515. As to this dispute, the
parties have agreed to be bound by a final decision in Ertz v.
Commissioner, docket No. 20336-04L, which involves a similar
issue.
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