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Federal tax lien was prematurely filed because petitioners were
negotiating an offer-in-compromise, and the second notice of
Federal tax lien did not reflect that the 2004 overpayment credit
of $4,664 was applied to reduce the balance owing.
In response, Mr. Knauss informed petitioner that he could
not reinstate a returned offer-in-compromise, an offer-in-
compromise does not prohibit the filing of a notice of Federal
tax lien, and the amount shown on a notice of Federal tax lien is
not reduced when a taxpayer makes a subsequent payment.
At the hearing, petitioner proposed an offer-in-compromise
or an installment agreement as a collection alternative. Mr.
Knauss and petitioner agreed that petitioners would provide a
completed Form 433-A to Mr. Knauss by November 28, 2005, so that
Mr. Knauss could determine which collection alternative would
suit petitioners’ financial situation.
On November 23, 2005, petitioners faxed a letter to Mr.
Knauss requesting an extension until December 15, 2005, to
provide the completed Form 433-A. Petitioners failed to provide
the Form 433-A by December 15, 2005, or anytime thereafter.
On January 12, 2006, respondent’s Appeals Office issued
petitioners a notice of determination sustaining the filing of
the second notice of Federal tax lien and finding:
The taxpayers have been given multiple opportunities to
resolve these liabilities via less intrusive means but
have failed to do so in a timely manner. The filing of
the NFTL is the only means of securing the government’s
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Last modified: November 10, 2007