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administrative procedure was met in this case. However, it is
questionable as to whether the proposed collection action
balanced the need for efficient collection of taxes with the
concern of petitioners that any collection action be no more
intrusive than necessary.
Payment plans are one possible option for an offer in
compromise. According to the instructions that accompany the
Form 656, there are three possible payment plans under the short-
term deferred payment offer. One plan requires full payment of
the realizable value of assets within 90 days from the date the
Internal Revenue Service accepts the offer, and payment, within 2
years of acceptance of the amount that they could collect over 60
months. A second plan permits a cash payment for a portion of
the realizable value of petitioners’ assets within 90 days of the
offer being accepted, and the balance of the realizable value
plus the remainder of the amount that could have been collected
over 60 months within 2 years. The third plan permits monthly
payments of the entire offer amount over a period not to exceed 2
years from the date of acceptance by the Internal Revenue
Service. Petitioners offered $100 per month for 2 years or 24
months, which equals the $2,400-compromise amount.5
5 Although not relevant to the facts of this case, there is
also a deferred payment offer that provides for a plan similar to
the short-term deferred plan (the third plan described above).
The deferred payment plan allows the entire offer amount to be
(continued...)
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Last modified: May 25, 2011