TAX COURT OPINION

Case: Mary Thompson Brady
Docket Number: 17938-08L
Judge: Colvin
Opinion Type: bench
Filed: 08/11/2009
Pages: 21

UNITED STATES TAX COURT . WASHINGTON , DC 2021 7 MARY THOMPSON BRADY , Petitioner , V . Docket No . 17938-08L . SERVICE COMMISSIONER OF INTERNAL REVENUE , Respondent . O R D E R Pursuant to Rule 152(b), Tax Court,Rules of Practice and Procedure, it i s ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial in the above case before Judge David Gustafson at Boston, Massachusetts, on June 24, 2009, containing his oral findings of fact and opinion rendered at the conclusion of the trial . In accordance with the oral findings of fact and opinion, decision will be entered for petitioner .. (Signed ) David Gustafson Judge Dated : Washington, D .C . August 11, 2009 SERVED AUG 17 2009 3 1 Bench Opinion by Judge David Gustafson June 24, 200 9 2 Brady v . Commissioner Docket No . 17938-08 L 3 THE COURT : The Court has decided to render 4 oral Findings of Fact and Opinion in this case, an d 5 the following represents the Court's oral Findings of 6 Fact and Opinion . The oral Findings of Fact and 7 Opinion shall not be relied on as precedent in any 8 other case . 9 This Bench Opinion is made pursuant to the 10 authority granted by section 7459(b) of the Interna l 11 Revenue Code of 1986, as amended , and Rule 152 of th e 12 Tax Court Rules'of Practice and Procedure . 13 By a "Notice of Determination" dated 14 June 16, 2008 (Ex . 49-J), the'IRS gave notice t o 15 petitioner Mary Thompson Brady that the IRS's Office 16 of Appeals had sustained the determination to proceed 17 with a levy to collect liabilities that Mrs . Brady had 18 failed to pay . We will not sustain tha t 19 determination . 20 Trial of this case was conducted on June 22, 21 2009, in Boston, Massachusetts . The parties ' 22 Stipulation of Facts and Supplemental Stipulation, 23 with Exhibits 1-J through 49-J was admitted int o 24 evidence, and Mrs . Brady gavelher testimony . We fin d 25 the following facts : Heritage Reporting Corporation (202) 628-14888 1 2 FINDINGS Mrs . Brady resided in Vermont when she file d 4 3 the petition in this suit . 4 Mrs . Brady's role at Pro Radi o 5 Mrs . Brady and her husband each owned 50% of 6 Pro-Radio, Inc ., which operated an AM and FM radi o 7 station . Mrs . Brady was the secretary and treasurer 8 of Pro Radio . She maintained the books and records 9 and did the bookkeeping, which included account s 10 payable, payroll, and billing . She stipulates that 11 she was "responsible for collecting, accounting for, 12 and paying over Pro Radio's employees' wag e 13 withholdings" . 14 Payroll tax delinquencie s 15 Because debtors defaulted on substantia l 16 obligations to the Bradys, serious hardships develope d 17 in Pro Radio' s business . For the calendar quarter s 18 ending March 1990 through September 1997, Pro Radio 19 failed to pay its employment taxes--i .e ., both the 20 employer's share of such taxes and the employ ees ' 21 share which Mrs . Brady withheld from employees' wages 22 and did not pay over . That withholding, referred to 23 as a "trust fund", is especially relevant to thi s 24 suit . 25 Mrs . Brady was aware of the non-payment of Heritage Reporting Corporation (202) 628-4888 5 1 the employment taxes, including the trust fun d 2 portion . At the time each payroll was due, she paid 3 the employees rather than using the available funds 4 for past-due withholdings, and she thus compounded the i 5 non-payment . She did this knowingly . However, sh e 6 believed that when the business was sold, there would 7 be sufficient proceeds to pay off the unpaid ta x 8 liabilities . By September 1997, the total trust funds 9 not paid over totaled more than $225,000 . 10 Pro Radio's bankruptcy { 11 In January 1997, Pro Radio filed a 12 chapter 11 bankruptcy petition . The IRS filed a proof 13 of claim in the bankruptcy for liabilities exceeding 14 $590,000, which presumably included the $225,000 o f 15 unpaid trust funds . During the bankruptcy proceeding , 16 Pro Radio sold off its assets . Pursuant to a 17 bankruptcy court order, the IRS obtained the sal e 18 proceeds . That court order included two references to 19 "the trust fund portion of the IRS claim" . The order 20 authorized the Debtor (i .e ., Pro Radio) to sell th e 21 assets and-- 22 to pay certain closing costs including rea l 23 estate taxes, recording fees and payment o f 24 the trust fund portion of the IRS claim , 25 which shall be paid directly by th e Heritage Reporting Corporation (202) 628-4888 6 1 Debtor . *** and 2 3 4 that the IRS shall apply the payment set IT IS FURTHER ORDERED 5 forth in the preceding paragraph to th e trust fund portion of the IRS claim * * * . 6 7 8 This language had been drafted as a proposed order by 9 counsel for Pro Radio . At the request of the IRS, the 10 bankruptcy judge made a handwritten addition to th e 11 order : After the first reference to "the trust fund 12 portion of the IRS claim," he',wrote and circled a 13 numeral 1, and he then added a footnote 1 near the 14 bottom of the page, which reads, "All rights of the 15 IRS reserved as to allocation." The order does no t 16 define this allocation . The judge made no addition o r 17 revision to the second reference to "the trust fun d 18 portion of the IRS claim" . Nothing in our record her e 19 illuminates the bankruptcy judge's intention as to the 20 meaning of the provision as to "allocation" . Neither 21 party to the instant suit offered a transcript of th e 22 June 1997 bankruptcy hearing at which the order was 23 entered . 24 The IRS interpreted the order (and, i t 25 appears, had intended its proposed emendation) to mean Heritage Reporting Corporatio n (202) 62844888 I 7 1 that the IRS had the right to'apply the proceeds first 2 to satisfy tax liabilities other than the trust fun d 3 portion, and it did so . If it had applied th e 4 proceeds first to the trust fund portion, that portion 5 would have been entirely satisfied . However, afte r 6 the IRS instead first applied the payments in larg e 7 part to other liabilities, more than $85,000 of the 8 trust fund portion remained unpaid . 9 Assessment of the trust fund recovery penalt y 10 In June 1997 (while the Pro Radio bankruptc y 11 was still proceeding), the IRS assessed agains t 12 Mrs . Brady a so-called "Trust Fund Recovery Penalty " 13 (TFRP) pursuant to section 6672 for the unpaid trust i 14 funds that had accrued in the series of calenda r 15 quarters ending September 1996, in an amount o f 16 approximately $212,000 . In May 1999 Mrs . Brady filed 17 a chapter 13 bankruptcy petition, but the petition wa s 18 dismissed in February 2000 . December 1999 (afte r 19 the sale of Pro Radio's assets and before her 20 bankruptcy petition was dismissed), the IRS assesse d 21 against Mrs . Brady a TFRP for the four quarters endin g 22 September 1997, in an amount of more than $13,000 . 23 After the proceeds of the sale of Pro 24 Radio' s assets was applied to its tax liabilities , 25 some (but not all) of the trust fund portion had been Heritage Reporting Corporatio n (202) 628-4888 1 paid off . The IRS eventually ',reduced Mrs . Brady's 8 2 TFRP accordingly . 3 IRS collection actio n 4 In August 2006, years after the dismissal of 5 Mrs . Brady's bankruptcy petition in February 2000, the 6 IRS sent Mrs . Brady a "Reminder Notice" advising he r 7 that her TFRP liabilities then totaled about $87,000, 8 plus interest of about $112,000, for a total liabilit y 9 of about $199,000 . 10 In January 2007 the IRS sent Mrs . Brady a 11 "Final Notice" advising her of its intent to levy, and 12 of her right to request a collection due proces s 13 hearing (a "CDP hearing") . 14 The CDP hearin g 15 In February 2007 Mrs . Brady timely requested 16 a CDP hearing with the IRS's Office of Appeals . O n 17 her request, Mrs . Brady disputed that she owed th e 18 TFRP that the IRS demanded ("Disagree with amount IR S 19 says is owed") . In December 2007, during the course 20 of her CDP hearing, she made an offer in Compromise 21 (an "OIC"), with which she also sent financia l 22 information and a payment of $200 .50 . Her OI C 23 proposed that she make a series of payments in that 24 amount . The Office of Appeals referred Mrs . Brady's 25 OIC to the IRS's Centralized OIC location fo r Heritage Reporting Corporation (202) 628=4888 9 1 evaluation . 2 On January 18, 2008, Mrs . Brady's husband 3 was diagnosed with prostate cancer . By letter of 4 January 22, 2008, she advisedithe Centralized OI C 5 personnel of this development, stated that she and her 6 husband did not know how this would affect thei r 7 finances, explained that the friend who was willing to 8 lend them the money they were offering required tha t 9 they finalize an agreement with the IRS by March 1 , 10 and asked that their proposal be "accepted in a timel y 11 fashion" . Her letter proposed that if the IRS had not 12 acted by then, the Bradys "will have no choice but t o 13 request that all proceedings relating to this matter 14 be put on hold ." They received no reply by March 1, 15 and thereafter stopped making payments toward the OIC . 16 Mr . Brady had his surgery in late April, an d 17 Mrs . Brady resumed her payments in May or June 2008 . 18 However, in the meantime the IRS ha d 19 continued the CDP process . The recipient of th e 20 Bradys' January 22 letter did not route it to th e 21 individuals actually working their case . (Se e 22 Ex . 38-J .) By letter of April 2, 2008, th e 23 Centralized OIC unit requested more information i n 24 support of the OIC "no later than 04/16/2008" and said 25 that if the Bradys did not provide it, "your offer may Heritage Reporting Corporatio n (202) 628-114888 1 0 1 be returned or rejected" . The Bradys answered with a 2 letter dated April 14, 2008, pointing out their letter 3 of January 22, 2008, that had asked that their case be 4 "put on hold" if their OIC was not accepted b y 5 March 1, and pointing out the,IRS's non-response to 6 the letter . They advised that Mr . Brady had als o 7 contracted pneumonia and requested more time unti l 8 "Mr . Brady has completed, andjrecovered from, hi s 9 scheduled surgery" . 10 In response to the Bradys' April 14 letter, 11 a Centralized OIC employee telephoned Mr . Brady and 12 learned that his surgery was scheduled for April 30 . 13 For that reason the IRS declined to extend th e 14 previous deadline (April 14) for providing information 15 and by letter of April 22 returned Mrs . Brady's OI C 16 with the word "RETURN" stamped once on each page and 17 several times over the signatures . The April 2 2 18 letter stated that the IRS Office of Appeals woul d 19 make the final decision on the OIC . The Brady s 20 complained in a letter of April 28, but the office of 21 Appeals followed through by ajletter of May 16, 2008, 22 which required the Bradys to get up to date" with 23 their proposed payments within 10 days, or els e 24 Mrs . Brady's OIC would be considered withdrawn, since 25 a failure to make payments "is treated as a mandatory Heritage Reporting Corporatio n (202) 628-;4888 1 1 1 withdrawal of the offer" . Appeals also demanded that 2 the requested information be provided within the same 3 10 days . Instead the Bradys wrote a letter of May 24 , 4 stating that they would await% a response to thei r 5 letter of April 28 . They did'receive a reply o n 6 May 28, but it made no concession or accommodation ; 7 and on June 16, 2008, the Office of Appeals issued its 8 Notice of Determination . 9 The Notice of Determination stated tha t 10 Mrs . Brady was not entitled to dispute her liability 11 for the TFRP because she had a prior opportunity to do 12 so during her bankruptcy proceeding . The Notice o f 13 Determination explained that Mrs . Brady's OIC was 14 considered withdrawn . 15 Mrs . Brady filed her petition in this Court 16 on July 21, 2008 . 17 18 "Collection Due Process" revie w OPINIO N 19 When a taxpayer fails to pay any Federal 20 income tax liability within 10 days of notice an d 21 demand, the IRS may collect the unpaid tax by levy on 22 the taxpayer's property, pursuant to section 6331 . 23 However, before the IRS may proceed with that levy, 24 the taxpayer is entitled to administrative an d 25 judicial review pursuant to section 6330 . Heritage Reporting Corporation (202) 628 ; 4888 12 1 Administrative review is carried out by way of a 2 hearing before the IRS's Office of Appeals (under 3 section 6330(b) and (c)) ; .and, if the taxpayer i s 4 dissatisfied with the outcome there, he can appea l 5 that determination to the TaxlCourt (under 6 section 6330(d)), as Mrs . Brady has done . 7 The pertinent procedures for the agency- 8 level CDP hearing are set forth in section 6330(c) : 9 First, the appeals officer must obtai n 10 verification from the Secretary that the requirements 11 of any applicable law or administrative procedure have 12 been met . Sec . 6330(c)(1) . In the case of a levy t o 13 collect a TFRP, the basic requirements (se e 14 sec . 6331(a), (d)) for which the appeals officer 15 obtains verification are : theIRS's giving timel y 16 notice that the person is subject to the penalty (sec . 17 6672(b)) ; timely assessment of the liability (secs . 18 6672(b)(3) ; 6501(a)) ; the giving to the taxpayer o f 19 notice and demand for paymentlof the liabilit y 20 (sec . 6303 ) ; and the giving t the taxpayer of notic e 21 of intention to levy and of the taxpayer's right to a 22 hearing (secs . 6330(a), 6331(d)) . In the instan t 23 case, Mrs . Brady does not dispute that th e 24 requirements of any applicable law or administrative 25 procedure were met in compliance with sectio n Heritage Reporting Corporation (202) 628 ,4888 13 1 6330(c) (1) . 2 Second, the taxpayer may "raise at the 3 hearing any relevant issue relating to the unpaid tax 4 or the proposed levy," including challenges to th e 5 appropriateness of the collection action and offers of i 6 collection alternatives . Sec 6330(c) (2) (A) . 7 Mrs . Brady did propose a collection alternative (a n 8 OIC) which the IRS returned and did not accept, s o 9 that issue is subject to review here . 10 Third, the taxpayer may contest th e 11 existence and amount of the underlying tax liability, 12 but only if she did not have an opportunity to dispute 13 the tax liability . Sec . 6330 ( c)(2)(B) . Here th e 14 Appeals officer did not allow1Mrs . Brady to dispute 15 liability because of the mistaken assumption that she 16 had been able to make such a dispute in her prio r 17 bankruptcy proceeding . Respondent admits that this 18 was an error and acknowledges that Mrs . Brady i s 19 entitled to dispute liability before this Court . (Se e 20 Respondent's Pretrial Memorandum at 3-4 .) 21 Return of the OI C 22 We review the appeals officer' s 23 determinations regarding a collection action for an 24 abuse of discretion, Goza v . Commissioner , 114 T .C . 25 176 (2000)--that is, whether the determinations wer e Heritage Reporting Corporation (202) 628 ;4888 14 1 arbitrary, capricious, or without sound basis in fact 2 or law . See Murphy v . Commis- I 125 T .C . 301, 320 3 (2005), affd . 469 F .3d 27 (lst Cir . 2006) ; Sego v . 4 Commissioner , 114 T . C . 604, 6 0 (2000) . 5 Here the most troublesome decision by 6 respondent's personnel was their denial of a reques t 7 for a modest amount of additional time because o f 8 Mr . Brady's recent cancer diagnosis and his upcoming 9 surgery, their insistence instead that the Bradys 10 provide information and get up to date on installmen t 11 payments, and their return of the OIC when the Bradys 12 objected . The decision is es ecially problemati c 13 because, by the IRS's own admission, the IRS receive d 14 the Bradys' January 22 letter but did not route it t o 15 the individuals actually working their case . (See 16 Ex . 38-J . ) 17 On the one hand, it!is the job of this Court 18 to review the actions of the Office of Appeals and to 19 identify and correct abuses of discretion . On th e 20 other hand, it is not the joblof this Court t o 21 substitute its own judgment for the reasonabl e 22 judgment (even if not the infallible judgment) of the 23 appeals officer . The question here is whether the 24 action taken by the office of Appeals--i .e ., demanding 25 information and payment, and returning the OIC when Heritage Reporting Corporatio n (202) 62844888 1 5 1 the Bradys did not promptly comply--was one of th e 2 options that a reasonable appeals officer might have 3 taken in the circumstance . Answering this questio n 4 would require determining, among other things, whether 5 the record is capable of being interpreted to sho w 6 that the Bradys, rather than being cooperative an d 7 reasonable, instead unreasonably behaved as if the y 8 were entitled to set their o w deadlines an d 9 conditions for compliance wit CDP procedures . We do 10 not resolve this difficult question because we ar e 11 able to decide the case on other grounds--i .e . , 12 Mrs . Brady's challenge to her underlying liability fo r 13 the trust fund recovery penalty . 14 Challenge to underlying liabilit y 15 When a taxpayer is entitled to "raise at th e 16 [CDP] hearing challenges to the existence or amount of 17 the underlying tax liability" we review that issu e 18 not for an abuse of discretion but de novo . See 19 20 Goza , 114 T .C . at 181-182 . Trust Fund Taxes and Penaltie s 21 Federal Insurance Contributions Act or FICA 22 tax is a payroll tax imposed on both employers an d 23 employees, secs . 3101, 3111, to fund Social Security 24 and Medicare . Pro Radio's un~aid payroll taxes were a 25 combination of Pro Radio's employer portion of FICA Heritage Reporting Corporation (202) 628 ;4888 1 6 1 tax, its employees ' portion of FICA tax that Pro Radio 2 withheld from its employees' wages and did not pa y 3 over, and income tax that Pro'Radio withheld from its 4 employees' wages and did not pay over . That is, i n 5 addition to being required to deposit Pro Radio's own 6 portion of FICA tax with the IRS, Mrs . Brady was also 7 required to remit to the IRS the employees' portion of 8 FICA and income tax that she had withheld from it s 9 employees' wages, see secs . 3102(b), 3403, bu t 10 Mrs . Brady did not do so . The FICA tax and income tax 11 that are withheld from employees' wages are held i n 12 trust for the United States, see sec . 7501( a), and ar e 13 known as trust fund taxes . 14 The withheld tax held in trust is sometime s 15 a temptation to employers who are in financia l 16 difficulty . They may be inclined to regard many of 17 their expenses as more urgent than payroll taxes and 18 to use the money for other purposes . In so doing , 19 they make the Government, in effect, an unwitting and 20 unwilling investor in their troubled business . Th e 21 Government's eventual receipt of the trust fund is no w 22 put at great risk, even though in its dealings with 23 the employees the Government must honor th e 24 withholding . That is, when the employer issues a 25 Form W-2 to the employee showing tax withholding, th e i Heritage Reporting Corporation (202) 628 ,4888 17 1 employee receives credit on his tax return for the tax 2 withheld, even if it is never paid over to the 3 Government . 4 To discourage such misuse of the trust fund 5 taxes , Section 6672(a) imposes " a penalty equal to th e 6 total amount of the tax . . . n t accounted for and pai d 7 over ." This penalty is imposed on any "perso n 8 required to collect, truthfully account for, and pay 9 over any" trust fund taxes "who willfully fails" to d o 10 so . Such persons are often referred to in the case 11 law as "responsible persons ." See Slodov v . United 12 States , 436 U . S . 238 ( 1978) . 13 The two preconditions for liability-- 14 responsibility for paying over the tax, and 15 willfulness in failing to do so -- are met i n 16 Mrs . Brady ' s case . She explicitly admits that she was 17 a person responsible to collect and pay over the tax , 18 and this admission is corroborated by the stipulate d 19 facts and her own testimony . Mrs . Brady disputes 20 willfulness, however, since she never intended to 21 permanently deprive the Government of the money , 22 believed that she would be able to do so, and fel t 1 23 that circumstances compelled her to leave the trust 24 fund liability unpaid--and mounting . 25 Mrs . Brady's notion of "willfulness" , Heritage Reporting Corporation (202) 628,4888 1 8 1 however, is not the actual concept enacted i n 2 Section 6672 . Whether "the f ilure to pay the overdue 3 taxes [is ] willful has been seen . . . as calling for 4 proof of a voluntary, intentional, and consciou s 5 decision not to collect and remit taxes thought to be 6 owing--and not as requiring a special intent t o 7 defraud or deprive the Government of monies withhel d 8 on its account ." Scott v . United States , 354 F .2 d 9 292, 295 (Ct . Cl . 1965) . A finding of willfulness does 10 not entail "a showing of evil motive, bad purpose, o r 11 calculated malevolence ." The focus of inquiry i s 12 rather "on the deliberate nature of the individual' s 13 election not to pay over the money and th e 14 circumstances of that refusal " Godfrey v . United 15 States , 748 F .2d 1568, 1578 (Fed . Cir . 1984) . 16 Mrs . Brady was fully aware that she was not paying the 17 trust fund taxes and was instead paying other bills , 18 including payroll . This knowing and deliberate actio n 19 constitutes willfulness under section 6672 . 20 Therefore, the penalty was appropriately assessed 21 against her . 22 The order of the bankruptcy cour t 23 Even though a responsible person's liability 24 for the 6672 penalty is distinct from the employer' s 25 liability for the tax, the penalty is in fact a means Heritage Reporting Corporatio n (202) 62814888 1 9 1 of collecting the tax . The IRS does not use the 2 penalty to collect the trust fund taxes more than 3 once . See United States V . Sotello , 436 U .S . 278 , 4 279 n .12 (1978) . For that reason, the IRS has reduced 5 Mrs . Brady's penalty assessment to the extent that the 6 trust fund taxes have been satisfied--chiefly b y 7 proceeds from the sale of Pro Radio's assets . 8 However , the IRS limited the application of thos e 9 proceeds to the trust fund by applying them first t o 10 other liabilities . We find that the Bankruptcy Court 11 ordered the IRS to do otherwise--that is, the Cour t 12 ordered that the proceeds be applied first to satisf y 13 first Pro Radio's trust fund tax liabilities (an d 14 thereby to eliminate Mrs . Brady's TFRP liability) . 15 There is no question that the order a s 16 originally drafted required that the proceeds b e 17 applied to pay the trust fund taxes . In two separat e 18 paragraphs the order required payment of "the trus t 19 fund portion of the IRS claim" . The IRS requested the 20 addition of a footnote to the first such provision , 21 which footnote is a sentence fragment that reads i n 22 its entirety, "All rights of the IRS reserved as to 23 allocation ." The IRS eventually believed--and w e 24 assume that it originally intended--that this language 25 would free the agency to "allocate" the proceeds to Heritage Reporting Corporatio n (202) 6284888 2 0 1 other liabilities . According to Mrs . Brady's accoun t 2 of those proceedings, neither she nor her attorne y 3 stated any objection to or made any comment about the 4 footnote, and we assume that she understood, to he r 5 dismay, that the language would have the effect tha t 6 the IRS intended . 7 However, it is the intent of the bankruptcy 8 judge and not the parties that governs the meaning of 9 the judge's order . The record before us does no t 10 include a transcript that would show any explanation 11 that the IRS may have given to the judge as the reaso n 12 for and effect of its requested footnote, or that 13 would show any comments of th~ judge that would 14 illuminate his understanding and intention . W e 15 therefore are left with the text of the order itself 16 as the only evidence of what the bankruptcy judg e 17 ordered, and the best reading of that order does no t 18 comport with the IRS's interpretation of it . If th e 19 bankruptcy judge had intended to issue an orde r 20 permitting the IRS to do anything other than apply the 21 proceeds first to satisfy the trust fund taxes, h e 22 would not have issued the order that he issued . 23 First, the bankruptcy judge did not strike 24 or amend the language to which he added the footnote, 25 which language continued to authorize "payment of the Heritage Reporting Corporatio n (202) 628 ; 4888 2 1 1 trust fund portion of the IRS claim, which shall be 2 paid directly by the Debtor . " 3 Second, he did not ~trike, amend, o r 4 footnote the second relevant order paragraph, which 5 stated : 6 IT IS FURTHER ORDERED 7 that the IRS shall applylthe payment set 8 forth in the preceding paragraph to the 9 trust fund portion of th IRS claim * * * . 10 If the footnote had the meaning that the IR S 11 maintains, it would have contradicted this ver y 12 explicit order, and would have rendered the order no t 13 ambiguous but incoherent . It is impossible t o 14 reconcile the IRS's interpretation with the unchanged 15 language of this order . 16 Third, the fragment the IRS induced him to 17 add in the footnote--"All rights of the IRS reserve d 18 as to allocation"--makes no mention of trust fun d 19 taxes or of any other liabilities and does not stat e 20 that the IRS is free to apply the proceeds in a manne r 21 contrary to the other instructions in the order . 22 Rather, it makes a vague allowance for "allocation" . 23 The IRS assumes this must be nterpreted to mean 24 "allocation as between trust and taxes and other 25 liabilities", but it does not say this, and, again , Heritage Reporting Corporation (202) 628-4888 22 1 such a provision would contradict other explici t 2 directions in the order . Th e "allocation" that th e 3 judge reserved to the IRS may have been allocation a s 4 between taxable periods (if the proceeds had no t 5 covered all of the trust fund taxes ), or it may have 6 been allocation of the remainder after the trust fund 7 payment that he had ordered . But we cannot assum e 8 that this ambiguous fragment overruled explicit 9 provisions that he left in his order . 10 Rather, under the evidence before us, we 11 conclude that the IRS was under order of th e 12 bankruptcy court to apply the proceeds of the sale o f 13 Pro Radio ' s assets to cover Pro Radio's trust fund tax 14 liabilities . If the IRS had done so , Mrs . Brady' s 15 corresponding penalty liability would have been 16 abated , and it . should have been . As a result , 17 Mrs . Brady is no longer liable for the TFRP , and the 18 IRS's proposed levy is therefore not appropriate an d 19 cannot be sustained . 20 An appropriate order will be issued , 21 granting petitioner relief from the proposed levy . 22 This concludes the Court's oral Findings o f 23 Fact and opinion in this case . 24 (Whereupon, at 1 :26 p .m ., the bench opinion 25 in the above-entitled matter was concluded . ) Heritage Reporting Corporation (202) 628 ;4888