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Respondent argues that, because the matter was already being
considered by the Office of Appeals pursuant to petitioner’s
request for a section 6330 hearing, the Form 656 instructions
concerning appeals from rejections of offers in compromise do not
apply to this case. Respondent also argues that there is no
requirement that the Appeals Office wait a particular period of
time after requesting an amended offer. In any event, respondent
argues that petitioner’s amended offer was inadequate and would
not have changed the Appeals officer’s determination. Finally,
respondent contends that, because the Appeals officer relied on a
financial analysis and articulated reasons for her determination,
there was no abuse of discretion.
Section 7122(a) authorizes compromise of a taxpayer’s
Federal income tax liability. Grounds for compromise include
doubt as to liability, doubt as to collectibility, or promotion
of effective tax administration. Sec. 301.7122-1T(b), Temporary
Proced. & Admin. Regs., 64 Fed. Reg. 39024 (July 21, 1999); see
sec. 7122(c)(1). The record reflects that doubt as to
collectibility exists, but there is disagreement as to the
collectible amount. There is no indication in the record that
collection of the full liability would create economic hardship
or affect voluntary compliance by taxpayers. See sec. 301.7122-
1T(b)(4), Temporary Proced. & Admin. Regs., supra.
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