respectively. The Debtor’s taxable income included in excess of $100,000 resulting
from the farm liquidation. The Debtor was unable to pay the tax liabilities. After
receiving payment demands for the tax liabilities, the Debtor contacted counsel to
assist him. In 1997, the Debtor, through counsel, entered into installment agreements
with the federal and state taxing authorities, agreeing to pay each the sum of $25 per
month. The Debtor submitted a Collection Information Statement (“CIS”) to each
taxing authority in connection with the negotiation of the installment agreements. In
his 1997 CIS, he listed the value of his house at $29,000, the value of a 1997 Pontiac
Grand Prix at $21,000, and the value of a 1993 Dodge Ram at $20,000.
The Debtor filed all tax returns and paid all taxes due for subsequent years, and
made all payments due under the installment agreements covering the 1996 taxes.
His taxable income was as follows: $28,898 in 1997, $46,818 in 1998, $45,291 in
1999, and $51,820 in 2000.
He also continued to file all requested Collection
Information Statements with the taxing authorities. On his 2000 CIS, the Debtor
listed the value of his house at $30,000, the value of the 1997 Pontiac Grand Prix at
$6,000, and the value of the 1993 Dodge Ram at $3,000.
In 1998, the Debtor and his wife began depositing all paychecks into the wife’s
sole account. The wife made all payments for household expenses from her account.
Expenses paid included mortgage payments and car payments. By the time of trial,
the home mortgage had been paid in full.
In 2000, the Debtor, through counsel, submitted an offer in compromise to the
Internal Revenue Service seeking to satisfy the 1996 federal tax liability for the sum
of $1,500. The Internal Revenue Service rejected the offer. In 2001, the Debtor
decided to seek bankruptcy protection. He reached his decision after discussions with
The Debtor’s income increased when he got a raise and fluctuated
depending on overtime worked.