- 9 -
sound basis in fact or law. See Woodral v. Commissioner, 112
T.C. 19, 23 (1999).
B. Petitioners’ Offer
Section 7122(a) authorizes a compromise of a taxpayer’s
Federal tax liability. An OIC may be accepted where there is
doubt as to liability or collectibility, or where it would
promote effective tax administration. Sec. 301.7122-1T(b),
Temporary Proced. & Admin. Regs., 64 Fed. Reg. 39024 (July 21,
1999). One of the factors considered in determining whether to
accept or reject an OIC is whether the collection of the full
liability would result in economic hardship to the taxpayer.
Sec. 302.7122-1T(b)(4)(i), Temporary Proced. & Admin. Regs.,
supra. Economic hardship is defined as the inability of the
taxpayer to pay his or her reasonable living expenses. Sec.
301.6343-1(b)(4), Proced. & Admin. Regs.
Throughout the consideration of their OIC, petitioners
maintained that they do not have sufficient income to pay their
liabilities in full. After reviewing petitioners’ financial
situation, however, the Settlement officer determined that their
financial situation enabled them to pay the entire tax liability
within a reasonable time. This determination was based on the
information petitioners provided to the Settlement officer as to
their income and expenses. Petitioners’ financial information
indicated that both petitioners had gainful employment and that
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011