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When the first and second calls were made, a liability could
be compromised only if there was doubt as to liability or doubt
as to collectibility.6 Sec. 301.7122-1(a), Proced. & Admin.
Regs. Petitioners’ liability was not in doubt at the time of the
“agreement” because petitioners had filed the tax returns
calculating the taxes due and were not contesting the accuracy of
the returns. Petitioners have not established that they
delivered any financial statements or other evidence of their
financial situation to the IRS at the time of the first call
indicating doubt as to collectibility. Thus, the evidence does
not demonstrate that a valid basis existed for compromising
petitioners’ tax liabilities.
The regulations also required offers in compromise to be
submitted on “forms prescribed by the Internal Revenue Service”.
Sec. 301.7122-1(d)(1), Proced. & Admin. Regs. An offer is
accepted “only when the proponent thereof is so notified in
writing.” Sec. 301.7122-1(d)(3), Proced. & Admin. Regs.; see
also Ringgold v. Commissioner, supra. Petitioners did not submit
a written offer in compromise to the IRS. They also do not claim
to have received a written acceptance of the purported agreement
from the IRS. Without satisfaction of these procedural elements,
we cannot find that a valid compromise was made.
6 In response to the enactment in 1998 of sec. 7122(c), the
regulations were changed to add a third basis for compromise.
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