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hearing with Appeals to review the propriety of the proposed
levy.
On December 2, 2003, petitioners requested the referenced
hearing with Appeals. The request asserted in relevant part that
the proposed levy was inappropriate because: (1) Petitioners
were entitled to compromise their liability on account of
effective tax administration, given, they claimed, that the Hoyt
partnership cases were “longstanding” and petitioners were the
“unwitting victims” of fraud perpetrated by Hoyt; (2) interest
was required to be abated under section 6404(e), an issue,
petitioners noted, then pending before the Court of Appeals for
the Sixth Circuit in Mekulsia v. Commissioner, 389 F.3d 601 (6th
Cir. 2004), affg. T.C. Memo. 2003-138; (3) the Commissioner’s
imposition of tax-motivated interest for 1984 through 1986 was
inappropriate given the facts of the case; and (4) petitioners
were not given an opportunity to be heard during the examination
of the Hoyt partnerships in that, they claimed, they were
represented by Hoyt who had an impermissible conflict of interest
and was thus incapable of representing them properly.
On May 12, 2004, Nancy Driver (Driver), a settlement officer
in Appeals, contacted petitioners with respect to their request
by mailing a letter to Merriam, petitioners’ representative as
stated on a power of attorney. The letter, a copy of which was
mailed to petitioners, stated that Driver would contact
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