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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
petitioners’ offers are with respect to doubt as to
collectibility.4
Section 7122(c) provides the standards for evaluation of
such offers. Under section 7122(c)(2):
(A) * * * the Secretary shall develop and publish
schedules of national and local allowances designed to
provide that taxpayers entering into a compromise have
an adequate means to provide for basic living expenses.
(B) Use of schedules.-–The guidelines shall
provide that officers and employees of the Internal
Revenue Service shall determine, on the basis of the
facts and circumstances of each taxpayer, whether the
use of the schedules published under subparagraph (A)
is appropriate and shall not use the schedules to the
extent such use would result in the taxpayer not having
adequate means to provide for basic living expenses.
[Emphasis added.]
The Appeals officer chose to use the national averages and that
use resulted in petitioners’ being categorized as not having
adequate means to provide for basic living expenses.
The national average statistics are published by the
Internal Revenue Service, but use of the statistics by Appeals
officers is not mandatory. The Appeals officer exercised
discretion in ignoring petitioners’ submitted expense amount and,
4 Doubt as to collectibility exists in any case where the
taxpayer’s assets and income are less than the full amount of the
assessed liability. Sec. 301.7122-1T(b)(3), Temporary Proced. &
Admin. Regs., 64 Fed. Reg. 39024 (July 21, 1999).
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Last modified: May 25, 2011