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means such as administrative and judicial collection remedies.
Rev. Proc. 2003-71, sec. 4.02(2), 2003-2 C.B. 517, 517. The
offer-in-compromise must include all unpaid tax liabilities and
periods for which the taxpayer is liable. 1 Administration, IRM
(CCH), pt. 5.8.1.7, at 16,256.
If an offer-in-compromise is submitted where a taxpayer has
also filed a bankruptcy petition, the Commissioner cautions
against acceptance of the offer-in-compromise in the window
between a taxpayer’s discharge in bankruptcy and the time the
final distribution is made because “it is uncertain whether the
Service would still have a valid claim in bankruptcy if an offer
is accepted.” 1 Administration, IRM (CCH), pt. 5.8.10.2.3(2), at
16,368. Thus, the Internal Revenue Manual guidelines advise that
“the amount acceptable for an offer should include the amount we
reasonably expect to recover from the bankruptcy in addition to
what can be collected from the taxpayer on non-discharged
liabilities or from property outside the bankruptcy.” Id.
It is clear from the administrative record that Mr. Conte
was concerned that accepting petitioners’ $9,024.25 offer-in-
compromise would risk respondent’s expected distribution from the
bankruptcy. Mr. Conte had extended contact with respondent’s
bankruptcy specialists. He also performed his own research,
including reviewing the IRM guidelines. Mr. Conte sought to
determine the likely amount respondent would receive from the
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Last modified: March 27, 2008