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When there are no grounds for compromise under the
provisions pertaining to doubt as to liability, doubt as to
collectibility, or effective tax administration due to economic
hardship, the IRS may compromise a liability to promote effective
tax administration where compelling public policy or equity
considerations identified by the taxpayer provide a sufficient
basis for compromising the liability. Sec. 301.7122-1(b)(3)(ii),
Proced. & Admin. Regs. Compromise will be justified only where,
due to exceptional circumstances, collection of the full
liability would undermine public confidence that the laws are
being administered in a fair and equitable manner. A taxpayer
proposing such a compromise will be expected to demonstrate
circumstances that justify compromise even though a similarly
situated taxpayer may have paid his liability in full. Id.
Petitioners have failed to demonstrate that there are any
circumstances showing that collection of their full liability
would undermine public confidence that the tax laws are being
administered fairly and equitably. Petitioners have not shown
evidence sufficient to warrant consideration of an OIC based on
effective tax administration grounds.
Having reviewed the entire record, including the financial
information presented to Ms. Clinger, the Court cannot find that
the determination rejecting petitioners' OIC was an abuse of
discretion. See Van Vlaenderen v. Commissioner, T.C. Memo.
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Last modified: May 25, 2011