                        T.C. Memo. 2006-46



                      UNITED STATES TAX COURT



     ESTATE OF BURTON W. KANTER, DECEASED, JOSHUA S. KANTER,
             INDEPENDENT ADMINISTRATOR, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 16412-05L.            Filed March 16, 2006.



     Robert E. McKenzie and Kathleen M. Lach, for petitioner.

     Sean Robert Gannon, for respondent.



                        MEMORANDUM OPINION


     HAINES, Judge:   This collection review case is before the

Court on the estate’s motion for abatement of assessments and

respondent’s motion to stay proceedings.     As discussed in detail
                                - 2 -

below, we shall deny the estate’s motion and grant respondent’s

motion.1

                              Background2

A.   Deficiency Proceedings

     In Inv. Research Associates, Ltd. v. Commissioner, T.C.

Memo. 1999-407, a Memorandum Opinion filed in 28 consolidated

dockets, the Court held, inter alia, that Burton W. and Naomi R.

Kanter were liable for Federal income tax deficiencies and

additions to tax for the taxable years 1978, 1979, 1980, 1981,

1982, 1983, 1984, and 1986.    The Court’s central holding in Inv.

Research Associates, Ltd. v. Commissioner, supra, sustained

respondent’s determination that Burton W. Kanter (Kanter)3 and

two associates, Claude Ballard (Ballard) and Robert Lisle

(Lisle),4 fraudulently attempted to evade tax by failing to

include in their taxable income certain kickback payments that

they received from a number of sources.     The Court also sustained



     1
        Section references are to sections of the Internal
Revenue Code, as amended, and Rule references are to the Tax
Court Rules of Practice and Procedure.
     2
        The record reflects and/or the parties do not dispute the
following background facts.
     3
        Burton W. Kanter died on Oct. 31, 2001, after the trial
in the consolidated cases, and the Estate of Burton W. Kanter,
Deceased, Joshua S. Kanter, Independent Administrator was
substituted as a party in the Kanter deficiency cases.
     4
        Robert Lisle died before the trial in the consolidated
cases, and his estate was substituted as a party in his
deficiency cases.
                              - 3 -

respondent’s determinations that Kanter failed to report income

and that he was not entitled to claimed deductions arising from

several transactions unrelated to the alleged kickback scheme.

     Special Trial Judge D. Irvin Couvillion presided at the

trial of the consolidated cases in Inv. Research Associates, Ltd.

Because Special Trial Judge Couvillion was prohibited under

section 7443A(c) from entering a decision in those cases, he

prepared an initial report which included his proposed findings

of fact and opinion (the Couvillion report).    The cases were then

assigned to Senior Judge Howard A. Dawson for adoption of the

Couvillion report and entry of decision.   Under Rule 183 in

effect at the time, the Couvillion report was not filed or

otherwise made a part of the record of the consolidated cases.5

Special Trial Judge Couvillion subsequently collaborated with

Judge Dawson in preparing a final report which became the Court’s

Memorandum Opinion in Inv. Research Associates, Ltd.

     After the parties submitted computations under Rule 155, the

Court entered decisions in the Kanter deficiency cases reflecting

the parties’ stipulations as to certain issues and the Court’s

holdings in Inv. Research Associates, Ltd.     Thereafter, the

estate and Naomi R. Kanter appealed to the U.S. Court of Appeals



     5
        The Court amended Rule 183, effective Sept. 20, 2005, to
provide a procedure for service on the parties of a Special Trial
Judge’s recommended findings of fact and conclusions of law and
for the filing of objections and responses.
                               - 4 -

for the Seventh Circuit seeking review of some (but not all) of

the issues decided by this Court in respondent’s favor.    In

Estate of Kanter v. Commissioner, 337 F.3d 833, 839 (7th Cir.

2003), the Court of Appeals listed the issues subject to review

as follows:   (1) Additions to tax for fraud, (2) adjustments

related to the Bea Ritch Trusts, (3) disallowed deductions for

activities related to a painting of George Washington, (4)

unreported income for 1982 based on a bank deposits analysis, (5)

unreported income from Equitable Leasing transactions, and (6)

unreported income from a transaction related to a shelf

corporation identified as Cashmere.    The Kanters also appealed

the Court’s denial of their motions to make the Couvillion report

part of the record in their cases, and Naomi R. Kanter appealed

issues related to her claims for relief under section 6015.     At

the same time, Ballard appealed his cases to the Court of Appeals

for the Eleventh Circuit, and the Estate of Lisle appealed its

cases to the Court of Appeals for the Fifth Circuit.

     In Ballard v. Commissioner, 321 F.3d 1037 (11th Cir. 2003),

the Court of Appeals for the Eleventh Circuit affirmed this

Court’s holdings as to Ballard in all respects.

     In Estate of Kanter v. Commissioner, supra, the Court of

Appeals for the Seventh Circuit affirmed in part and reversed in

part.   The Court of Appeals affirmed this Court’s holdings

denying release of the Couvillion report.    The Court of Appeals
                               - 5 -

also affirmed this Court’s holdings on five of the six

substantive issues (listed above).     The Court of Appeals for the

Seventh Circuit reversed this Court’s holding that Kanter was not

entitled to deduct expenses incurred with regard to his

activities involving a painting of George Washington.     Id. at

854-857.

     In Estate of Lisle v. Commissioner, 341 F.3d 364 (5th Cir.

2003), the Court of Appeals for the Fifth Circuit affirmed in

part and reversed in part.   The Court of Appeals reversed this

Court’s holding that there was sufficient evidence to sustain

respondent’s determination that the Estate of Lisle was liable

for additions to tax for fraud.   On the other hand, the Court of

Appeals upheld this Court’s holding that the Estate of Lisle was

liable for the deficiencies in dispute.

     Ballard and the Estate of Kanter filed petitions for

certiorari with the Supreme Court.     In Ballard v. Commissioner,

544 U.S. 40, __, 125 S. Ct. 1270, 1286 (2005), the Supreme Court

reversed the judgments of the Courts of Appeals for the Seventh

and Eleventh Circuits in Estate of Kanter and Ballard, and

remanded those cases “for further proceedings consistent with

this opinion.”   Specifically, the Supreme Court held that the

collaborative process that this Court employed before filing its

Memorandum Opinion in Inv. Research Associates, Ltd. v.

Commissioner, T.C. Memo. 1999-407, was inconsistent with the
                               - 6 -

Court’s Rules of Practice and Procedure.   The Supreme Court

indicated that the failure to disclose the Couvillion report and

to specify the Tax Court Judge’s mode of reviewing that report

impeded fully informed appellate review of the Tax Court’s

decision.   Ballard v. Commissioner, 544 U.S. at ___, 125 S. Ct.

at 1283.

     In Estate of Kanter v. Commissioner, 406 F.3d 933, 934 (7th

Cir. 2005), the Court of Appeals vacated and remanded the Kanter

deficiency cases to this Court “for further proceedings

consistent with the Supreme Court’s decision in Estate of Burton

W. Kanter v. Commissioner of Internal Revenue, No. 03-1034”.

     In Ballard v. Commissioner, 429 F.3d 1026, 1027 (11th Cir.

2005), the Court of Appeals for the Eleventh Circuit remanded the

Ballard cases to this Court with the following instructions:

     (1) The “collaborative report and opinion” of the Tax
     Court is ordered stricken; (2) The original report of
     the special trial judge is ordered reinstated; (3) The
     Chief Judge of the Tax Court is instructed to assign
     this matter to a regular Tax Court Judge who had no
     involvement in the preparation of the aforementioned
     “collaborative report;” (4) The Tax Court shall proceed
     to review this matter in accordance with the dictates
     of the Supreme Court, and with the Tax Court's newly
     revised Rules 182 and 183, giving “due regard” to the
     credibility determinations of the special trial judge
     and presuming correct fact findings of the trial judge.
     * * *

     In Estate of Lisle v. Commissioner, 431 F.3d 439 (5th Cir.

2005), the Court of Appeals for the Fifth Circuit recalled its

earlier mandate and directed this Court to reexamine the question
                               - 7 -

whether the Estate of Lisle is liable for tax deficiencies

consistent with the instructions handed down by the Court of

Appeals for the Eleventh Circuit in Ballard v. Commissioner, 429

F.3d at 1027.

     On June 16, 2005, this Court issued an order in the Kanter

deficiency cases directing that the Couvillion report be served

on the parties and be made a part of the record in those cases.

     On December 16, 2005, this Court issued an order vacating

and setting aside the decisions entered in the Kanter deficiency

cases, striking the Court’s Memorandum Opinion in Inv. Research

Associates, Ltd. v. Commissioner, supra, reinstating the

Couvillion report, and directing the parties to file written

objections, followed by responses, to the recommended findings of

fact and conclusions of law contained in the Couvillion report.

On December 16, 2005, respondent filed petitions for panel

rehearing with the Courts of Appeals for the Eleventh and Fifth

Circuits.   By order dated January 11, 2006, the Court stayed

further action in the Kanter deficiency cases pending the final

disposition of respondent’s petitions for panel rehearing filed

with the Courts of Appeals for the Eleventh and Fifth Circuits.

Both Courts of Appeals recently denied respondent’s petitions.
                                 - 8 -

B.   Collection Proceedings

      As noted above, the estate appealed this Court’s decisions

in the Kanter deficiency cases to the Court of Appeals for the

Seventh Circuit.   The estate did not post a bond under section

7485 to stay the assessment or collection of the tax liabilities

in dispute during the pendency of the appeals.    Consequently,

respondent entered assessments against the estate for the

deficiencies, additions to tax, and increased interest set forth

in the Court’s decisions in the Kanter deficiency cases.

      On January 13, 2003, respondent issued to the estate a Final

Notice--Notice of Federal Tax Lien Filing and of Your Right to a

Hearing regarding the estate’s unpaid Federal income taxes for

1978 to 1984, 1986, and 1991.6    The estate submitted to

respondent’s Office of Appeals (Appeals Office) a timely request

for an administrative hearing under section 6320.7

      On August 4, 2005, respondent’s Appeals Office issued to the

estate a Notice of Determination Concerning Collection Action(s).

The Appeals Office determined (1) the liens were properly filed,

(2) the estate’s offer-in-compromise based on doubt as to


      6
        The taxable year 1991 was not the subject of any of the
notices of deficiency in dispute in the Kanter deficiency cases.
The record suggests that respondent entered an assessment against
the estate for 1991 based upon the disposition of a so-called
TEFRA partnership proceeding for 1991.
      7
        The record in this case does not include copies of the
Notice(s) of Federal Tax Lien that would have precipitated the
issuance of the Final Notice--Notice of Federal Tax Lien Filing.
                                - 9 -

liability and collectibility was not acceptable because it was

“detrimental to the interests of fair tax administration”, and

(3) the liens would not be released.    The estate filed with the

Court a timely petition for lien or levy action challenging

respondent’s notice of determination.

     The estate subsequently filed a motion for abatement of

assessments.    The estate maintains that the assessments that

respondent entered against the estate are no longer valid

inasmuch as the Court’s decisions in the Kanter deficiency cases

have been vacated.    According to the estate, in the absence of

valid assessments, respondent must release the liens in dispute.

     Respondent filed (1) a response in opposition to the

estate’s motion and (2) a motion to stay proceedings.    Relying

primarily upon Estate of Smith v. Commissioner, 115 T.C. 342

(2000), respondent avers that the assessments entered against the

estate remain valid notwithstanding that the Court’s decisions in

the Kanter deficiency cases have been vacated.    Respondent also

contends that, considering the current procedural posture of the

Kanter deficiency cases, the Court should stay this collection

case until such time as decisions in the Kanter deficiency cases

become final.

     The estate filed an objection to respondent’s motion to stay

proceedings and a reply to respondent’s response.    In addition,

the estate filed a notice informing the Court that, after the
                              - 10 -

petition was filed in this case, respondent filed additional

liens in Illinois and Florida against certain trusts alleged to

be alter egos of the estate and/or Naomi R. Kanter.8

                            Discussion

     Section 6321 imposes a lien in favor of the United States on

all property and rights to property of a person liable for tax

when a demand for the payment of the person’s taxes has been made

and the person fails to pay those taxes.    Such a lien arises when

an assessment is made.   Sec. 6322.    Section 6323(a) requires the

Secretary to file a notice of Federal tax lien if the lien is to

be valid against any purchaser, holder of a security interest,

mechanic’s lienor, or judgment lien creditor.     Lindsay v.

Commissioner, T.C. Memo. 2001-285, affd. 56 Fed. Appx. 800 (9th

Cir. 2003).   From the taxpayer’s perspective, the filing of such

a lien may have the negative effects of creating a cloud on the

taxpayer’s title to property and impairing the taxpayer’s

creditworthiness.   See, e.g., Magana v. Commissioner, 118 T.C.

488 (2002).




     8
        We note that the notice of determination in dispute was
issued solely to the Estate of Burton W. Kanter and the petition
in this case is captioned solely in the name of the Estate of
Burton W. Kanter. It is not clear that the estate’s counsel has
authority to represent Naomi R. Kanter as to collection matters.
Under the circumstances, any collection activities that
respondent has initiated solely against Naomi R. Kanter do not
appear to be relevant to this proceeding.
                              - 11 -

     In the Internal Revenue Service Restructuring and Reform Act

of 1998, Pub. L. 105-206, sec. 3401, 112 Stat. 746, Congress

enacted sections 6320 (pertaining to liens) and 6330 (pertaining

to levies) to provide specified protections for taxpayers in tax

collection matters.   Section 6320 provides that the Secretary

shall furnish the person described in section 6321 with written

notice of the filing of a notice of lien under section 6323.     The

notice required by section 6320 is to be provided not more than 5

business days after the day of the filing of the notice of lien.

Sec. 6320(a)(2).   Section 6320 further provides that the person

may request administrative review of the filing of a lien (in the

form of an Appeals Office hearing) within 30 days beginning on

the day after the 5-day period.   Section 6320(c) provides that

the Appeals Office hearing generally shall be conducted

consistent with the procedures set forth in section 6330(c), (d),

and (e).   Section 6330(d) provides for judicial review of the

administrative determination in the Tax Court or a Federal

District Court, as may be appropriate.   There is no dispute that

the estate properly invoked this Court’s jurisdiction under

section 6320.

A.   The Estate’s Motion for Abatement of Assessments

     The estate contends that the assessments upon which the

disputed liens are based were rendered invalid as the result of

postassessment appellate developments in the Kanter deficiency
                                - 12 -

cases, and, therefore, respondent is obliged to release the

liens.    We disagree.

     We begin our analysis by noting that there is no suggestion

that respondent acted improperly in assessing the deficiencies

and additions to tax set forth in the decisions that the Court

entered in the Kanter deficiency cases or in filing a notice of

Federal tax lien against the estate.     In this regard, section

7485(a) provides in pertinent part that the filing of a notice of

appeal from a Tax Court decision under section 7483 “shall not

operate as a stay of assessment or collection of any portion of

the amount of the deficiency determined by the Tax Court” unless

the taxpayer has filed with the Court (1) a bond in a sum fixed

by the Tax Court (not exceeding double the amount of the portion

of the deficiency being appealed) and with surety approved by the

Tax Court or (2) a jeopardy bond.    The estate did not file an

appeal bond as described in section 7485(a) at the time it filed

its notices of appeal in the Kanter deficiency cases.

Consequently, respondent entered assessments against the estate

in accordance with this Court’s decisions, and, contemporaneously

with that action, a lien under section 6321 arose in favor of

respondent by operation of section 6322.     To give vitality to the

lien against the estate’s other creditors, if any, respondent was

obliged under section 6323(a) to file a notice of Federal tax

lien.    This respondent did.
                              - 13 -

     The estate nevertheless contends that the assessments and

lien described above were nullified by the Supreme Court’s

opinion in Ballard v. Commissioner, 544 U.S. 40, 125 S. Ct. 1270

(2005), and this Court’s actions (1) vacating the decisions

entered in the Kanter deficiency cases, (2) striking the Court’s

Memorandum Opinion in Inv. Research Associates, Ltd. v.

Commissioner, T.C. Memo. 1999-407, and (3) reinstating the

Couvillion report.   The estate asserts that “the case before the

Court presents the seemingly unprecedented situation in which the

entire legal basis for a lower court ruling has been disallowed

because of an improper process and the ruling itself has been

completely vacated.”   Although the Kanter deficiency cases

certainly are in a novel procedural posture, we are not persuaded

that the factors that the estate relies upon require abatement of

the assessments in question or release of the disputed liens.

     We agree with respondent that the proper disposition of the

estate’s motion is governed by section 7486, which addresses

assessment and collection of tax deficiencies that have not been

stayed by the filing of an appeal bond.   Section 7486 provides:

     SEC. 7486.   REFUND, CREDIT, OR ABATEMENT OF AMOUNTS
                  DISALLOWED.

          In cases where assessment or collection has not
     been stayed by the filing of a bond, then if the amount
     of the deficiency determined by the Tax Court is
     disallowed in whole or in part by the court of review,
     the amount so disallowed shall be credited or refunded
     to the taxpayer, without the making of a claim
                                - 14 -

     therefor, or, if collection has not been made, shall be
     abated.

     This Court has previously interpreted and applied section

7486 in circumstances analogous to those presented in the instant

case.    In Estate of Smith v. Commissioner, 108 T.C. 412 (1997),

revd. 198 F.3d 515 (5th Cir. 1999), this Court sustained the

Commissioner’s determination that the taxpayer was liable for an

estate tax deficiency.    Like the estate in the present case, the

taxpayer in Estate of Smith appealed this Court’s decision but

did not file a bond pursuant to section 7485 to stay assessment

and collection of the estate tax deficiency during the pendency

of its appeal.    As a result, the Commissioner assessed the estate

tax deficiency of $564,429.87, plus interest of $410,848.76.

After the Commissioner applied credits for an earlier payment and

for a separate overpayment of income tax, the taxpayer owed

$265,900.87.    The Commissioner administratively stayed collection

of that amount.    On appeal, the Court of Appeals for the Fifth

Circuit reversed, vacated, and remanded the case.     Estate of

Smith v. Commissioner, 198 F.3d at 532.    Thereafter, while the

case was on remand to this Court for further proceedings, the

taxpayer filed a motion with this Court seeking an abatement of

the assessment (described above) and a refund of amounts

collected by the Commissioner.

        In Estate of Smith v. Commissioner, 115 T.C. 342 (2000), we

denied the taxpayer’s motion.    Much of what we said in that case
                              - 15 -

regarding the purpose and effect of section 7486 is pertinent to

the resolution of the estate’s motion for abatement of

assessments.   In particular, we stated:

     The language of section 7486 provides for abatement and
     refund of the “amount of the deficiency determined” by
     this Court that has been “disallowed in whole or in
     part by the court of review”, regardless of whether the
     taxpayer files a claim for relief. The statute simply
     acts as a procedural device ensuring that the
     Commissioner follows a decision of the court of review
     in situations where it can be ascertained that all or a
     part of the amount of the deficiency determined by this
     Court was disallowed. Where the court of review
     reverses and remands but does not indicate that any
     ascertainable “amount” of the previously determined
     deficiency has been precluded, it cannot be said that
     the court of review has “disallowed in whole or in
     part” the “amount of the deficiency determined by the
     Tax Court.”

          In the instant case, the Court of Appeals reversed
     and remanded with instructions regarding the proper
     evidence to consider for valuing Exxon's claim against
     the estate. The Court of Appeals made no finding
     regarding the correct value of the Exxon claim, nor did
     it preclude an ultimate finding of value that would
     result in the same deficiency amount contained in our
     prior decision. The Court of Appeals simply held that
     post-death events, such as the settlement of the Exxon
     claim, should not be considered in making the valuation
     determination. The Court of Appeals remanded with
     instructions to make the valuation based on facts that
     existed on the date of decedent's death. The amount of
     the prior deficiency determination was not disallowed
     in whole or in part.

Id. at 345.

     Our interpretation of section 7486 as articulated in Estate

of Smith v. Commissioner, 115 T.C. at 345, is consistent with the

interpretation of that provision by the Court of Appeals for the

Seventh Circuit in Tyne v. Commissioner, 1969-2 USTC par. 9508
                             - 16 -

(7th Cir. 1969), and by the Court of Appeals for the Sixth

Circuit in United States v. Bolt, 375 F.2d 725 (6th Cir. 1967).

     In Tyne v. Commissioner, T.C. Memo. 1966-214, revd. 385 F.2d

40 (7th Cir. 1967), revd. on remand 409 F.2d 485 (7th Cir. 1969),

the Court of Appeals for the Seventh Circuit twice reversed and

remanded this Court’s decisions.   Although the taxpayer did not

file an appeal bond to stay assessment during either of his

appeals, he filed a motion with the Court of Appeals, following

its second reversal and remand to this Court, seeking an order

directing the Commissioner to abate the assessment entered

against the taxpayer based upon this Court’s original decision.

The Court of Appeals denied the taxpayer’s motion,9 stating in

pertinent part:

          Although it is arguable logic that the reversal of
     the decisions which were the foundations of the
     assessments compelled abatement, we consider it a
     better construction of 26 U.S.C. §7486 that reversal
     with remand for further proceedings, as distinguished
     from reversal and final disallowance of deficiencies,
     did not require abatement until action of the tax court
     upon remand. On March 28, 1968, the tax court made
     decisions on remand which did decrease the
     deficiencies. We think that corresponding abatement of
     the assessment was required at that time * * *.

Tyne v. Commissioner, 1969-2 USTC par. 9508, at 85,298.




     9
        The Court of Appeals acknowledged the Commissioner’s
concession that he would abate and refund to the taxpayer the
difference between the deficiency determined in this Court’s
original decision and the reduced deficiency determined in this
Court’s decision following the first remand.
                               - 17 -

       In the instant case, neither the Supreme Court nor the Court

of Appeals for the Seventh Circuit made any finding regarding the

correct amount of the estate’s deficiencies, nor did they

preclude ultimate findings on remand that would result in the

same deficiencies set forth in our prior decisions.    In

particular, the Supreme Court held that this Court’s Rules of

Practice and Procedure did not warrant the collaborative process

that the Court employed in formulating its Memorandum Opinion in

Inv. Research Associates, Ltd. v. Commissioner, T.C. Memo. 1999-

407.    Ballard v. Commissioner, 544 U.S. at    , 125 S. Ct. at

1279-1283.    The Supreme Court remanded the Kanter and Ballard

deficiency cases to the Courts of Appeals for the Seventh and

Eleventh Circuits, respectively, for further proceedings

consistent with its opinion.    Id. at __, 125 S. Ct. at 1286.    On

remand, the Court of Appeals for the Seventh Circuit vacated its

decision, reinstated the estate’s appeal, denied the estate’s

requests (1) for an order of production, (2) to supplement the

record, and (3) for additional briefing, and remanded the cases

to this Court for further proceedings consistent with the Supreme

Court’s decision in Ballard.    Estate of Kanter v. Commissioner,

406 F.3d at 934.    In the absence of any specific finding by

either the Supreme Court or the Court of Appeals disallowing the

deficiencies (in whole or in part) determined by this Court, we

shall deny the estate’s motion for abatement of assessments.
                              - 18 -

     The estate’s argument that Estate of Smith v. Commissioner,

115 T.C. 342 (2000), is factually distinguishable from the

instant case is misplaced.   The estate contends that, unlike

Estate of Smith, the legal process and bases for the Court’s

decisions in the Kanter deficiency cases have “been disallowed

* * * and completely vacated.”     The estate further contends that,

unlike the instant case, this Court’s decision in Estate of Smith

was never vacated.   However, in Estate of Smith v. Commissioner,

198 F.3d at 532, the Court of Appeals concluded its opinion by

stating that “the rulings of the Tax Court are reversed, the

judgment vacated, and this case is remanded” and its mandate

stated:   “REVERSED, VACATED, and REMANDED.”   Thus, this Court was

instructed to vacate its decision in Estate of Smith pursuant to

the Court of Appeals’ mandate.10    We are not persuaded that the

reversal of this Court’s decisions in Inv. Research Associates,

Ltd. v. Commissioner, T.C. Memo. 1999-407, because of flaws in

the Court’s internal review and adoption process, is meaningfully

different from the reversal of our decision in Estate of Smith.

In both cases, the appellate mandate required this Court’s

decisions to be vacated for the purpose of allowing further

proceedings to correct the errors identified during the appellate



     10
        To comply with such a mandate, this Court’s prior
decision must be vacated to make way for the entry of a new
decision based upon the further proceedings mandated by the
reviewing court.
                              - 19 -

review process.   In sum, the differences in the cases that the

estate points to are not meaningful.

B.   Respondent’s Motion To Stay Proceedings

     Respondent contends that, considering the procedural posture

of the Kanter deficiency cases, this collection case should be

stayed until final decisions are entered in the deficiency cases.

The estate opposes respondent’s motion to stay solely on the same

legal theory underlying its motion for abatement of assessments;

i.e., that the assessments are invalid and the liens should be

released.

     We recognize that granting respondent’s motion to stay

proceedings, in effect maintaining the status quo, would preserve

his position in relation to other creditors, while the estate’s

assets would remain under the cloud cast by respondent’s lien.

However, practical realities weigh in favor of granting

respondent’s motion.   In particular, if we do not stay this case,

it will be calendared for trial in due course.   Given that we do

not know the exact amount (if any) of the estate’s tax liability

at this time, we risk wasting valuable judicial resources

addressing the question whether the Appeals Office abused its

discretion in rejecting the estate’s offer-in-compromise.   Under

all the circumstances, we conclude that the interests of justice

would best be served by staying this case until the amount of the
                             - 20 -

estate’s tax liability is finally resolved in the deficiency

cases.

     To reflect the foregoing,



                                      An order will be issued

                                 denying the estate’s motion

                                 for abatement of assessments and

                                 granting respondent’s motion

                                 to stay proceedings.
