Anthony Edward and S.F. O'Connor - Page 5

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          petitioners’ OIC.  Respondent determined that petitioners did not           
          meet the requirements for effective tax administration.  The                
          notice states:  (1) Although petitioners were each unemployed,              
          Mrs. O’Connor could work if necessary and Mr. O’Connor was only             
          temporarily disabled; (2) petitioners’ residence and the building           
          had fair market values of $120,500 and $192,128, respectively,              
          providing enough equity to pay the tax liabilities in full; and             
          (3) the rent petitioners received from the building allowed them            
          to meet their monthly living expenses.  Respondent did agree,               
          however, to abate the assessment of the accuracy-related penalty            
          for 2000.  Respondent also indicated that respondent would take             
          no further collection action unless petitioners failed to file or           
          pay future income taxes or their income increased substantially.            
               Section 6321 imposes a lien in favor of the United States on           
          all property and rights to property of a person when a demand for           
          the payment of the person’s liability for taxes has been made and           
          the person fails to pay those taxes.  Such a lien arises when an            
          assessment is made.  Sec. 6322.  Section 6323(a) requires the               
          Secretary to file a notice of Federal tax lien if the lien is to            
          be valid against any purchaser, holder of a security interest,              
          mechanic’s lienor, or judgment lien creditor.  Lindsay v.                   
          Commissioner, T.C. Memo. 2001-285, affd. 56 Fed. Appx. 800 (9th             
          Cir. 2003).                                                                 

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