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owe”, the sum of $1,928,732 was reported. Mrs. Chou’s signature
on the return appeared approximately 1-1/2 inches below the line
for “amount you owe”. Her occupation was shown as interior
designer.
On November 19, 2001, petitioners filed an offer-in-
compromise (OIC) on “Doubt as to Liability” for 2000, citing
pending Federal legislation. On December 6, 2001, while their
OIC was pending, the Internal Revenue Service sent them a notice
of intent to levy for 2000. They ultimately withdrew their OIC
for 2000 based on “Doubt as to Liability”, and, on February 4,
2002, submitted an OIC based on “Effective Tax Administration”
or, in the alternative, “Doubt as to Liability with Special
Circumstances”. Their OIC was rejected on August 26, 2002, and
petitioners sought review by the Appeals Office. On March 20,
2003, the Appeals Office sustained rejection of the OIC for 2000.
Petitioners sought judicial review of that rejection more than
30 days after the offer was rejected.
Petitioners’ Federal income tax return for 2001 was timely
filed in April 2002. On or about July 20, 2003, petitioners
filed joint amended returns for 2000 and 2001, claiming that the
transaction involving the Cisco shares originally reported on
their 2000 tax return should have been reported in 2001.
Petitioners explained their position as follows:
Taxpayers amend their 2001 personal income tax
return to report their * * * [AMT] preference in tax
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Last modified: November 10, 2007