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Petitioners also reported gross monthly income of $9,307 and
monthly living expenses of $6,238.
In the letter explaining the offer amount, petitioners
stated that they were offering to pay $346,258 “for all Hoyt
related years to be paid in one lump sum payment. The
amount accounts for all the tax liability for 1980 through
1998, and regular interest through April 15, 1993. This
offer assumes that no Tax Motivated Transaction (TMT)
interest is imposed”. Petitioners also noted that Mrs.
Freeman had an innocent spouse case pending before the Tax
Court at docket No. 18985-02 for her 1980 through 1986 and
1994 tax years.
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 November 23, 2004, respondent issued petitioners a
notice of determination. Respondent determined that
petitioners had: (1) Total net realizable equity in their
assets of $917,913; (2) an amount collectible from future
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