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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.
Discussion
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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Last modified: May 25, 2011