Ralph M. and Rosemary L. Conlon - Page 13

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          Appeals Office failed to properly consider their proposed offer             
          in compromise.  We review respondent’s action for abuse of                  
          discretion, on the basis of the arguments and information                   
          available to the Appeals officer when the discretion was                    
          exercised.  See Sego v. Commissioner, 114 T.C. at 610.                      
               The Appeals officer reviewed the financial information                 
          provided to him by petitioners and determined that he was unable            
          to accept petitioners’ offer in compromise.  Specifically, the              
          Appeals officer’s determination was predicated on a financial               
          analysis of petitioners’ monthly income and expenses, assets, and           
          ability to pay, based on data provided by petitioners on Form               
          433-A.  Petitioners offered to pay $8,026 on a total liability              
          that as of March 24, 2003, was in excess of $21,000.  Respondent            
          concluded that the net realizable equity in petitioners’ assets             
          was considerably greater than the amount offered in compromise.             
          See Schenkel v. Commissioner, T.C. Memo. 2003-37.                           

               Based on financial information petitioners provided,                   
          respondent rejected their offer in compromise.  We find this                
          action to be a reasonable exercise of discretion by respondent in           
          administering the offer in compromise program.                              

               E.   Conclusion                                                        

               There is no basis in the record for the Court to conclude              
          that respondent abused his discretion with respect to any of the            

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