Gary and Johnean Hansen - Page 2

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          Appeals (Appeals) sustaining a proposed levy related to                     
          petitioners’ 1989 Federal income tax year.2  Petitioners argue              
          the proposed levy is improper because, they state, Appeals was              
          required to accept their offer of $90,258 to compromise what they           
          estimate is their $260,143 Federal income tax liability                     
          (inclusive of additions to tax, penalties, and interest) for 1987           
          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           
          Kennewick, Washington.                                                      
               Beginning in 1987, petitioners’ Federal income tax returns             
          claimed losses and credits from their investment in partnerships            
          organized and operated by Walter J. Hoyt III (Hoyt).  One of                

               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 1987 through 1996.  Petitioners included            
          with that submission a letter in which they stated that they                
          wished to compromise their tax liability for 1987 through 1998.             
          We read petitioners’ offer to include 1987 through 1998.                    
               4 While the petition references sec. 6621(c) interest,                 
          respondent did not determine that petitioners were liable for               
          such interest in the referenced years.  We express no opinion on            
          the subject.                                                                

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