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bankruptcy file and noting that “secured claims get paid first
and then priority.” Mr. Conte noted in his case record that
there were also outstanding employment tax liabilities for
petitioners and that final collection notices had not yet been
issued with respect to those liabilities.
On or about May 24, 2004, petitioners submitted a completed
Form 656, Offer in Compromise, to respondent seeking to resolve
their outstanding employment and income tax liabilities for
$9,024.25, to be paid within 90 days from notice of acceptance of
the offer. Upon receipt of the offer-in-compromise, Mr. Conte
contacted petitioners to seek additional financial information.
Over the course of several months, Mr. Conte and petitioners
corresponded on multiple occasions with respect to additional
documents Mr. Conte needed in evaluating petitioners’ offer-in-
compromise. In one letter to Mr. Conte dated August 13, 2004,
petitioners requested that “given that the Bankruptcy Court has
failed to render a final accounting to date, the penalties
attributable to the principal balance outstanding should be
waived.”
While he was attempting to obtain additional information
about petitioners’ economic situation, Mr. Conte was also
attempting to determine what amount would be paid to respondent
from petitioners’ bankruptcy estate. Mr. Conte contacted
respondent’s internal bankruptcy specialists on numerous
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Last modified: March 27, 2008