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petitioners’ offer in compromise could not be accepted because
they could pay their tax liability in full.
On September 11, 2002, the Appeals Office issued a Notice of
Determination Concerning Collection Action(s) Under Section 6320
and/or 6330 (notice of determination) notifying petitioners of
the determination to proceed with collection of the 1991 income
tax liability.
On October 7, 2002, petitioners filed a Petition for Lien or
Levy Action Under Code Section 6320(c) or 6330(d) (the petition).
In the petition, petitioners allege, in part: “In 1991, we had
over a 200,000 loss * * *. We feel we are entitled to the full
loss. * * * The letter of deficiency was sent to our tax
representatives, we have no knowledge of result’s [sic].”
Respondent contends: (1) Petitioners cannot dispute their
underlying 1991 tax liability; and (2) there was no abuse of
discretion by respondent in refusing to accept petitioners’ offer
in compromise.
Discussion
A. Underlying Liability
In general, section 6330 prohibits the Commissioner from
proceeding with collection by levy until the taxpayer has been
given notice and an opportunity for an administrative review of
the matter (in the form of a hearing before the Internal Revenue
Service’s Office of Appeals). If the Commissioner issues a
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