Memorandum of Decision

NEWMAN, District Judge:

In this tax lienforeclosure action the Government seeks judgment against defendant Harold T. Teti, individually, in the amount of $26,775.48, plus accrued, unassessed interest, and against defendants Harold T. Teti and Ann B. Teti, individually and jointly, in the additional amount of $15,519.13, plus accrued, unassessed interest. The Government also requests that the Court order the sale of certain real property at 50 High Meadow Road , Hamden , for the purpose of satisfying these tax deficiences. Defendant New Haven Savings Bank holds a mortgage on the real estate that the Government concedes is superior to its tax lien; the Government therefore agrees that the proceeds of the proposed sale may be applied to the claimed tax liabilities only to the extent they exceed the amount outstanding on the mortgage. ¹ This Court has jurisdiction by virtue of 28 U. S. C. §§ 1340, 1345. A bench trial was held on January 28, 1975 .

I The amount alleged due from both Harold and Ann Teti ("Harold" and "Ann") represents a joint personal income tax deficiency for the years 1967-69. The Government's proof consisted of Internal Revenue Service Certificates of Assessments and Payments (Forms 4340), which reflected transactions of the Tetis' account for the relevant time periods.

Harold Teti's first objection to this (1040) assessment involves the report filed by an Internal Revenue Service (I. R. S.) representative of a conference participated in by the author of the report, Harold, and Harold's accountant. The report appears to have provided the basis for the certificates of assessment. The report, introduced into evidence by defendants, indicates, and Harold conceded at trial, that Harold agreed at the conference to a personal income tax deficiency of approximately $14,564.72. The controversy concerns what Harold claims to be a condition of that agreement.

Harold was for many years the president and sole stockholder of the New England Dredge & Dock Co., which had withheld monies from his salary for these tax years for the purpose of applying them to his personal income tax obligations. Harold did not submit forms 1040 for the years 1967-69 until May, 1970. On April 15, 1970 , the I. R. S., pursuant to 26 U. S. C. §6402, determined the withheld sums to be an overpayment and credited them to a separate outstanding tax obligation that had been assessed against Harold, see Section II, infra. Harold claims he agreed to the conference report on the understanding that these sums would be recredited to his 1040 obligations, leaving a total outstanding 1040 deficiency of only approximately $110.00. This dispute raises two questions: first, whether the alleged agreement was in fact made, and, second, if it was, whether its nonfulfillment in any way vitiates the assessment, which was based on the conference report. ²

The evidence in support of the agreement is limited. It consists of Teti's self-serving testimony, and pencilled computations on the face of the conference report, showing that if the monies withheld were reapplied to the Tetis' 1040 liability, their total remaining 1040 obligation would be approximately $110.00. Teti conceded at trial that these notations were made by his accountant, Mr. Brady, after he had received the report from the I. R. S. Teti did not call the accountant as a witness, and the record is therefore completely silent on whether the accountant believed he was in some sense completing the report, or was merely attempting to see what his clients' obligation would be if the credit reversal were effected. If Brady had been called, he could also have testified to the source of the figures relied on in his computations, i.e., whether his figures were based on notes taken at the conference or were taken from withholding records already in his possession. Both of these facts would be of substantial interest in determining the Government's role, if any, in the genesis of Teti's understanding. Teti's testimony is also rather weak. He testified to his "understanding" that the agreement had been reached, but never testified to anything said or done by an I. R. S. representative that would encourage such a belief; neither side ever asked him the basis of his understanding.

The assessment of a tax deficiency is entitled to a presumption of correctness, and the taxpayer bears the burden of persuading the trier that it is incorrect. E.g., United States v. Lease [65-2 USTC ¶9478], 346 F. 2d 696, 700 (2d Cir. 1965). Teti's evidence is insufficient to discharge that burden. In view of the vagueness of his own testimony and his failure to call his accountant, in light of his substantial pecuniary interest in establishing the agreement, ³ there is an insufficient basis to find that the claimed agreement was reached.

Moreover, an agreement such as that described by Teti would probably not confer any rights on him. Cf. Country Gas Service, Inc. v. United States [69-1 USTC ¶9178], 405 F. 2d 147 (1st Cir. 1969). The agreement is essentially a compromise of tax liability, and no one below the level of district director is authorized to enter into such compromises. See 26 U. S. C. §7122; Country Gas Services, Inc. v. United States , supra, 405 F. 2d at 150, text at n. 5. In the present case the agreement was reached, if at all, between the taxpayer and an I. R. S. official below the level of district director, and would not bind the Government. Ibid.

Teti next advances the spurious argument that because the I. R. S. once determined that the Teti account records reflected an overpayment, it was estopped from assessing a deficiency when the original determination proved to be error. The contention is without merit. Commissioner of Internal Revenue v. Newport Industries, Inc. [41-2 USTC ¶9574], 121 F. 2d 655 (7th Cir. 1941). ⁴ The second branch of Teti's argument in this regard is that if the Government is permitted to reassess a deficiency, it must reverse the credit and reapply the withheld monies to the 1040 obligation. Teti cites Newport Industries, supra, in support of this proposition, but the reliance is misplaced. Newport Industries holds no more than that such a reversal is permitted; the Court there was not faced with the question of whether it was required, see id. at 655, 656, and this Court sees no reason why a taxpayer should be permitted to determine to which of two outstanding tax liabilities an available fund is applied. ⁵ There is no dispute that the withheld sums were properly treated as an overpayment when the transfer was made, and the I. R. S. is not obligated to take a taxpayer's preferences into account when making its decision, see section III , infra.

For the foregoing reasons, and because Teti does not dispute the amount of the deficiency, the Government may have judgment against Harold Teti for personal income tax obligations in the amount sought.

Defendants' attack on Ann Teti's 1040 liability is somewhat more complex. Their argument again goes not to the amount of the underlying assessment, but to whether the agreement reached at the conference binds her. The claim is that it does not, because no one at the conference was authorized to act on her behalf.

Defendants again bear the burden of persuading the Court that the assessment is improper, United States v. Lease, supra, and again they have failed to discharge it. Ann Teti's own testimony is inconsistent with the claim she now makes. After testifying that in conversations with her concerning the conference, Harold described aspects of the discussion in terms of action on their joint obligations, the following colloquy took place.

THE COURT: Was it your understanding that Mr. Teti was at that conference just to handle his obligations and that yours weren't being discussed?

THE WITNESS: No--yes, I was under the impression that he was there to discuss our joint account.

* * *

THE COURT: You understood he was going to a conference with an accountant to see if something could be straightened out about the liability on that joint return?

THE WITNESS: Yes.

THE COURT: You did not think he was there just worrying about his liability and yours were going to be taken up on another day?

THE WITNESS: No, no. (Tr. p. 74)

It is also of some interest that Ann did not testify, and the record in no other respect indicates, that Ann made any objection when the couple received the conference report, which was addressed to both of them, and which indicated on its face that the audit had been performed on their joint account. The record thus suggests precisely the opposite of what defendants urge the Court to find. Defendants' own evidence supports the conclusion that both Tetis understood the conference was for the purpose of resolving their joint 1040 liability, and that Harold went to the conference with actual authority from Ann to act as her agent. The Court finds that Ann Teti knew who would be at the conference, that she knew her own tax obligation would be the subject of the conference, and that she knew she would have no separate representation and nevertheless took no steps prior to the conference either to object or to secure such representation. The Court thus concludes that the agreement reached at the conference binds Ann Teti to the same extent that it binds Harold.

Ann's next argument is that the assessment was prematurely made and therefore void. Title 26, U. S. C. §6213(a) provides in part that no income tax deficiency assessment shall be made before ninety days have elapsed from the mailing to the taxpayer of the notice of deficiency provided for in §6212. Section 6213(d) provides, inter alia, for the waiver of the notice and time restriction. In the present case it appears that no formal §6212 notice was sent, probably because the I. R. S. had obtained waivers from both Tetis. The waivers are not in evidence, although defendants concede that Harold executed one. In light of the assessments' resumed validity, the defendants have the burden of putting in issue whether Ann waived §6213's restrictions. Ann never testified that she did not execute a waiver, and the burden therefore never shifted to the Government. This alone would allow the Court to reject the claim. In any event, the parties seem agreed that the conference report provided adequate notice. The conference report was dated October, 1971, and the assessments were made on November 26, 1971 , within the prohibited ninety-day period. They urge that this conflict with the terms of §6213 renders the assessments void and deprives the Government of the right to use the certificates of assessment as evidence of Ann's 1040 liability. ⁶

Defendants misconstrue the purpose of §6213. Congress intended, by establishing the ninety-day period during which no assessment may be made, to provide the taxpayer with the opportunity to seek redetermination of the claimed deficiency in the Tax Court, see Lehigh Portland Cement Co. v. United States [39-2 USTC ¶9798], 30 F. Supp. 217 (Ct. Cl. 1939), and perhaps to allow the taxpayer time to arrange payment, see Bromberg v. Ingling [62-1 USTC ¶9296], 300 F. 2d 859 (9th Cir. 1962). See also, Lyddon & Co. v. United States [58-1 USTC ¶9338], 158 F. Supp. 951 (Ct. Cl. 1958). The Tetis sought neither Tax Court relief nor an injunction against enforcement of the assessment pending such review, ⁷ and the assessment, while originally premature, became valid and enforceable some time in February, 1972, at the expiration of the ninety-day period. Lyddon & Co. v. United States, supra; Lehigh Portland Cement Co. v. United States, supra. But see Bromberg v. Ingling, supra.

The wording of the statute is also inconsistent with the contention that a premature assessment is void. Section 6213 provides that "the beginning of such [enforcement] proceeding . . . during the time such prohibition is in force may be enjoined by a proceeding in the proper court." [Emphasis added.] The limiting language, underscored in the preceding excerpt, would have been entirely unnecessary if Congress had intended that a premature assessment be void.

Defendants' final argument with respect to Ann's 1040 liability is that the Government's application of what she terms "her share" of the sums withheld from her husband's salary to her husband's separate 941 liability deprives her of property without due process of law. The argument is grounded exclusively on the claim that Ann contributed to the overpayment by earning over $17,000 in the years involved. The difficulty with the claim, which is made for the first time in the post-trial memorandum submitted on her behalf, is that it is patently inconsistent with Ann's trial testimony:

Q. [by Mr. Mear]: Mrs. Teti, in 1967 and '68 and '69 were there any monies withheld from any of your income or did you have any income during this period?

A. No, I didn't have income per se . . .. The only evidence in the record thus comples the Court to find that during the tax years at issue Ann had no income, did not contribute to the overpayment, and therefore has no interest in any part of the monies withheld from her husband's salary. ⁸

The Government is thus entitled to judgment against Ann Teti for personal income tax deficiencies in the amount claimed.

II. The judgment sought against Harold Teti individually is based on the contention that he was a "person required to collect, truthfully account for, and pay over" withholding and social security taxes, 26 U. S. C. §3403, and wilfully failed to do so in violation of 26 U. S. C. §6672. Between 1946 and 1966 Teti was the president and sole shareholder of New England Dredge and Dock Co.; prior to 1966 he concededly made all the financial decisions of the company. In April, 1967, the District Director of Internal Revenue assessed 941 taxes and penalties against Harold for the fourth quarter of 1965, and all of 1966.

Teti's first challenge is that he was not a responsible person within the meaning of §6671(b), because during the periods in question his company had encountered severe financial difficulties, had no assets of its own, and was operating by factoring accounts receivable to a bank. He claims that bank officers were making all the corporation's financial decisions, including which debts to pay, and that the bank specifically instructed him not to pay the withholding taxes.

Teti did not offer testimony from a representative of the bank in question, and the Court finds it difficult to credit his account in the absence of such testimony; it is difficult to believe that a bank would recommend that a corporation fail to meet its obligations to the Government. Moreover, Teti testified that he had access to funds other than those supplied by the bank, including funds loaned by his wife and by himself, as well as funds borrowed from a custodian account in his son's name, and had full control over the use to which they were put. No reason appears why those funds could not have been used to meet Teti's 941 obligations. ⁹ In addition, at his deposition, the transcript of which was introduced into evidence at the trial, Teti testified that he at all times continued to sign the checks and had the keys to the safe. He characterized his arrangement with the bank as a "gentleman's agreement that I wouldn't do anything unless I had their approval"; the bank did not have the power to write checks or to prevent checks from being written. Teti's testimony suggests that he went along with the bank's advice in order to keep the bank happy and preserve the bank's availability as a source of financing.

On these facts, Teti's admission that he participated voluntarily in the payment arrangement with the bank is enough to sustain a finding that he was a responsible person. Kalb v. United States [74-2 USTC ¶9760], 505 F. 2d 506, 510 (2d Cir. 1974); United States v. Beradinis, Civil No. 13,664 (D. Conn. May 30, 1975 ) (Levet, J.). Whether or not the bank was also "responsible" is not material.

Teti's second argument is that his failure to pay over the funds was not "wilful," as required by §6672. He bases this on the claim, for which there is no support in the record other than his own testimony, that the company had no funds of its own with which to pay the obligation, and that no lenders, including Harold himself, were willing to lend funds for this purpose. These claims do not constitute an attack on wilfulness. Teti not only knew of the arrangement with the bank, but in fact negotiated it and participated in its execution. He made a deliberate choice in establishing this arrangement to pay other creditors and avoid paying the Government. That is sufficient to satisfy the statutory requirements. Kalb v. United States, supra, 505 F. 2d at 510-11; United States v. Beradinis, supra.

The third argument goes only to the validity of the assessments for the last quarter of 1965 and the first half of 1966. Taxes and penalties for these periods were assessed on two separate occasions, first on October 28, 19 66, and then again on April 14, 19 67 (on which occasion an assessment for the last half of 1966 was added). The defendant claims there is no statutory authority for the second assessment and that it is therefore void. The Government's response, based on the trial testimony of Internal Revenue Service officer Arthur Brusseau, who was in charge of defendants' accounts, is that the October, 1966, assessment was a jeopardy assessment made pursuant to 26 U. S. C. §6861, and was abated and replaced by a more accurate assessment in April 1967. See 26 C. F. R. §301.6861-1.

Teti seems to concede that if the first assessment were in fact a jeopardy assessment, it would be valid; he argues instead that it was not. He also denies that it was ever abated, and contends that the second assessment is therefore invalid. Most of defendants' argument is based on matter not in the record; the only claim involving evidence properly before the Court is that documents in evidence conflict with the Government's characterization of the initial assessment. The Court's attention has not been called to any particular document, and the Court has found none that conflicts with the claim. In addition, Brusseau testified that he personally had imposed both assessments, that the initial assessment was a jeopardy assessment and had been abated, and that the Government had released liens based on the initial assessment. The Government has also disclaimed any right to collect on the basis of the initial assessment. Defendants have not carried their burden of demonstrating any defect in the assessment of 941 taxes and penalties. The Court finds the assessment of October 28, 19 66, to have been made in the belief that collection of the tax due from Teti would be jeopardized by delay, and complied fully with 26 U. S. C. §6861.

Teti's final argument is that the collection of the 941 taxes is barred by 26 U. S. C. §6502(a), which provides in part that a judicial proceeding to collect an assessed tax must be commenced within six years of the assessment. The complaint in the present action was filed on August 13, 1971 . The jeopardy assessment was made on October 28, 19 66, and the second assessment on April 14, 19 67. Regardless of which date is used, the action was begun within the six-year period.

III . The preceding sections of this opinion have determined that Harold Teti is individually liable for 941 taxes and penalties in the approximate amount of $26,700, and that Harold and Ann Teti are jointly and individually liable for 1040 taxes in the approximate amount of $15,500. The High Meadow Road real estate, worth approximately $55,000, is the only asset possessed by either of the Teti's against which the Government claims a lien for these taxes. The Government contends that from the property the mortgagee is entitled to the sum of $24,000, leaving approximately $30,000 to cover the tax liability. The Government claims that Harold has a two-thirds interest in this property, and that Ann has a one-third interest; if the Government is right, it would be entitled to claim the entire proceeds of a sale, after the bank had been satisfied. The Tetis contend that Ann is the sole owner of the property; if they are right, the Government can only satisfy the 1040 obligation from this property. This section of the opinion concerns that dispute.

The material facts are as follows. Emma Teti, Harold's first wife, died intestate on June 24, 19 61. By state law, her only child, Thomas, inherited a two-thirds interest in her real property, and her husband Harold inherited the remaining one-third interest. See Conn. Gen. Stat. §46-12. Thomas was a minor, and Harold therefore became his guardian. Of the three items of realty in the estate at the time of Emma's death, Harold sold two prior to 1966. ¹⁰ On March 17, 19 66, Harold executed a quitclaim deed that was introduced in evidence at the trial, which purported to convey to Ann Teti the entire interest that "I, Harold T. Teti . . . have or ought to have" in the High Meadow Road property. Thomas made no separate conveyance, and on May 8, 19 67, after having attained his majority, Thomas died. The Government's liens were all recorded on or after May 26, 19 67.

The defense claim is that the quitclaim deed conveyed not only the interest Harold held in his individual capacity, but also the two-thirds interest he held as a fiduciary for his son. The Government's position is that the deed conveyed only the one-third interest that Harold held personally, that Harold subsequently, upon the death of his son, acquired the remaining two-thirds interest, and that he never divested himself of that latter interest.

The only dispute concerns what the deed conveyed, and it appears that the Government is correct. ¹¹ A guardian needs the approval of the probate court to convey the real property of his ward, Conn. Gen. Stat. §45-238; cf. Elmendorf v. Poprocki, 155 Conn. 115 (1967), and it is conceded that Harold did not obtain such approval before conveying to Ann. Moreover, for a guardian's deed to convey the ward's interest effectively, it must reflect on its face the guardian's authority to make the transfer. See Howard v. Lee, 25 Conn. 1 (1856); Watson v. Watson, 10 Conn. 77 (1834). Harold's deed made no mention of his fiduciary capacity. ¹² The Court therefore concludes that Harold's deed conveyed no more than the one-third interest he held in his own name, and that he was seised of the remaining two-thirds interest at the time the Government's liens attached. ¹³

IV. Defendants' other arguments have been considered and are without merit. The foregoing opinion will serve as the findings of fact and conclusions of law required by Fed. R. Civ. P. 52(a). The Government will serve and submit, within twenty days, an appropriate form of judgment ordering sale of the High Meadow Road property and distribution of the proceeds in a manner consistent with the Court's conclusions.

¹ An attorney for the Bank entered an appearance but did not participated in the trial and filed no briefs.

² Defendants claim the certificates would be void and the Government would have to establish liability by some other means, which it concededly could not do.

³ See Section III , infra.

⁴ The present case is a stronger one for the Government than Newport Industries. The Tetis initially failed to file income tax returns for 1967-69, and, when they did, in May, 1970, they claimed they had no liability. Compare Blair v. United States , 6 F. 2d 484, 486 (D. C. Cir. 1925).

⁵ Ann Teti is of course in a different position. Her claims are discussed infra.

⁶ The Government did not offer the forms 1040. Ann argues that had they done so, she would have been able to establish that certain disallowed bad debt claims should have been allowed. She bears the burden of going forward, however, and has failed to discharge it.

⁷ Failure to take advantage of the remedies provided by §6213(a) may amount to laches, and may preclude assertion of any claim based on that section. Compare Ventura Consolidated Oil Fields v. Rogan [36-2 USTC ¶9494], 86 F. 2d 149, 156 (9th Cir. 1936).

⁸ Although Ann makes no claim other than the one discussed in the text, the Government has raised the possibility that Ann's claimed bad debt deductions, if they were allowed, might create a cognizable interest for her in the sums withheld from her husband's salary. First, defendants' bare claim that the disallowance was wrongful is insufficient to establish that proposition, and, second, it does not appear that this notion of "contributing" the deduction to establish the overpayment would create the interest for which Ann contends, i. e., it would not make her a "person who made the overpayment" within the terms of 26 U. S. C. §6402(a). Cf. Rev. Rul. 74-611, I. R. B. 1974-51, 12, 9 CCH Stand. Fed. Tax. Rep. ¶6287. See also, Maragon v. United States [57-2 USTC ¶9831], 153 F. Supp. 365 (Ct. Cl. 1957).

⁹ It is difficult to see why a claim of insufficient funds should give rise to an exemption from the statute's coverage at all. 26 U. S. C. §7501 requires that sums withheld be kept in a special fund in trust for the United States . Failure to have funds available is, if anything, an additional inclupating factor.

¹⁰ It may be that by those sales, the proceeds of which Harold invested in the corporation, Harold took his entire share of Emma's estate, leaving his son as the sole owner of the High Meadow Road property. The quitclaim deed would then have conveyed no interest at all. This question need not be decided.

¹¹ The Court also need not decide whether the Government is correct in claiming that the conveyance to Ann, if effective, was in fraud of the Government's claims, see Reconstruction Finance Corporation v. United Distillers Products Corp., 229 F. 2d 665, 667 (2d Cir. 1956) (applying Connecticut law), and whether, if it was, the Government's only remedy would be against Ann as transferee, compare United States v. Fidelity & Deposit Co. of Md. [54-2 USTC ¶9486], 214 F. 2d 565 (5th Cir. 1954).

¹² His failure to mention his fiduciary status on the face of the deed also undercuts Harold's testimony that it was his intent to transfer his son's interest. He was aware of his fiduciary capacity, and he testified that he had conversations with his son concerning the proposed transfer and that the son consented. The testimony would have been more persuasive had the deed recited that he was acting in two distinct capacities to convey two distinct interests.

¹³ Defendants have not argued that the terms of this quitclaim deed justify departing from the general rule that a quitclaim deed does not convey an after-acquired title. See 23 Am. Jur. 2d, Deeds §303 and cases there collected.

 

 

 

 

[77-2 USTC ¶9702] United States of America v. Mrs. Margaret Evelyn Roberts, Independent Executrix of the Estate of Thelma Alice White Giles, Deceased

U. S. District Court, East. Dist. Tax., Beaumont Div., No. B-75-108-CA., 436 FSupp 553, 5/27/77

[Code Sec. 7122--result unchanged by '76 Tax Reform Act]

Compromises: Agreement to settle tax liabilities: Contract not established.--The government's suit seeking enforcement of an alleged contract in settlement of a taxpayer's federal tax obligations was dismissed. The court held that a contractual agreement between the parties had never existed because: (1) the taxpayer's offer in settlement had expired before the government had attempted to accept it and (2) the government did not accept the taxpayer's settlement proposal as offered, but, in effect, made a counter offer that was never accepted by the taxpayer.

Dan McNulty, Assistant United States Attorney, Beaumont, Tex. 77704, William W. Guild, United States Attorney, Department of Justice, Dallas, Tex. 75242, for plaintiff. Tanner T. Hunt, Jr., P. O. Box 3708 , Beaumont , Tex. 77704 , for defendant.

Memorandum Opinion

Steger, District Judge:

This is a suit brought by the Government against Margaret Evelyn Roberts seeking enforcement of a contract for $13,000.00 which the Government contends was entered into between the Defendant and the Government on October 2, 1972. The issue facing the Court is whether the minds of the parties ever met so that a contract was made. The case was submitted to the Court by stipulation of fact. The parties were rather niggardly with the facts they provided to the Court, although there appears to be little, if any, dispute about them. After thoroughly perusing the stipulation, the exhibits, and the briefs and pleadings of the parties, the Court has managed to glean the following facts from the record:

In 1958, Jerome A. Giles died in Beaumont , Texas . On May 19, 19 67, approximately 9 years after his death, the Internal Revenue Service (hereinafter referred to as the IRS ) assessed deficiency excise taxes against the Estate of Jerome Giles and some of his business partners, and perfected liens against Mr. Giles' property interest. These deficiency excise taxes were in the amount of $41,000.00, and the taxes, penalties, and interest totaled in excess of $80,000.00.

Upon the death of Mr. Giles, all of his property, both real and personal, passed to his wife, Thelma Alice White Giles, who was also the executrix of Mr. Giles' estate. On July 31, 19 67, the IRS advised Mrs. Giles by mail that she should be aware of §§ 191 and 192 of Title 31 of the United States Code. According to the IRS , §192 provided that every executor or other person who pays any debt due by an insolvent person or estate for whom he acts before he pays the debts due the United States for such person or estate shall be personally answerable from his own estate to the extent of such payments for the debts remaining due and unpaid to the United States. The record then indicates that Thelma Giles died on June 12, 19 68, and Margaret Evelyn Roberts, the Defendant in this case, became the executrix of her estate. On December 24, 19 68, the IRS authorized the institution of an action against the estate of Thelma Giles as the transferee of properties of Jerome Giles.

It further appears from the record that on July 20, 1971, the attorney for the Defendant wrote Mr. Morris Silverstein, an attorney for the Tax Division of the Department of Justice, and offered "to settle all federal tax obligations alleged to be owed by such estate (the estate of Thelma Giles) for the total amount of $13,000.00." ¹ An attorney for the Tax Division of the Department of Justice responded to the offer of the Defendant on August 9, 1971. In this letter the Tax Division acknowledged the receipt of the offer, which they interpreted to be an offer "to pay $13,000.00 in full settlement of the tax obligations owed by the estate of Thelma Alice White Giles as a result of that estate being a transferee of Jerome A. Giles." ² The letter further stated that the Defendant's ofter would be processed in accordance with normal procedure, and