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Before the payment due date, Mr. Renbarger offered to
compromise the estate’s Federal estate tax liability of
$4,267,373 with respondent for $2,166,000. Respondent initially
rejected the offer in compromise (OIC).3 Mr. Renbarger appealed
and respondent requested additional information to support the
OIC. Respondent finally denied Mr. Renbarger’s appeal of his
rejection of the OIC, determining that collecting an amount
larger than the estate’s OIC would not create an economic
hardship.
Mr. Renbarger planned to pay the Federal estate tax by
selecting five real properties to advertise for sale without the
assistance of a realty company.4 Mr. Renbarger’s asking price
for one property was more than three times the value at which it
was reported on the estate’s Federal estate tax return. By the
payment due date, none of the advertised properties was sold or
contracted to be sold.
Mr. Renbarger sold only one property before the payment due
date. The amount received, $1,572,276, was escrowed for
3More specifically, respondent rejected the estate’s OIC
because respondent’s examination showed that: (1) Respondent
could collect a larger amount than the estate offered; (2) no
exceptional circumstance existed; and (3) the estate failed to
establish that an economic hardship would be created by
liquidating enough assets to pay the Federal estate tax in full.
4On Jan. 16, 2003, almost 2 years after the payment due
date, the estate hired a professional realty company to advertise
and sell three of its properties.
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Last modified: May 25, 2011