Thomas C. Johnson - Page 10

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          position with respect to any relevant issues, including those               
          items enumerated in section 6330(c)(2)(A); i.e., spousal                    
          defenses, challenges to the appropriateness of the collection               
          action, and offers of collection alternatives.                              
               Here, petitioner apparently expressed interest in an offer             
          in compromise.  Section 7122(a), as pertinent here, authorizes              
          the Secretary to compromise any civil case arising under the                
          internal revenue laws.  Regulations promulgated under section               
          7122 set forth three grounds for compromise of a liability:  (1)            
          Doubt as to liability, (2) doubt as to collectibility, or (3)               
          promotion of effective tax administration.  Sec. 301.7122-1(b),             
          Proced. & Admin. Regs.4  With respect to the third listed ground,           
          a compromise may be entered to promote effective tax                        
          administration where:  (1)(a) Collection of the full liability              
          would cause economic hardship; or (b) exceptional circumstances             
          exist such that collection of the full liability would undermine            


               4 Sec. 301.7122-1, Proced. & Admin. Regs., contains an                 
          effective date provision stating that the section applies to                
          offers in compromise pending on or submitted on or after July 18,           
          2002.  Sec. 301.7122-1(k), Proced. & Admin. Regs.  Previous                 
          temporary regulations by their terms apply to offers in                     
          compromise submitted on or after July 21, 1999, through July 19,            
          2002.  Sec. 301.7122-1T(j), Temporary Proced. & Admin. Regs., 64            
          Fed. Reg. 39027 (July 21, 1999).  Because the final and temporary           
          regulations do not differ materially in substance in any way                
          relevant here, and for purposes of simplicity and convenience,              
          the final regulations will be cited.  We further note that                  
          temporary regulations are entitled to the same weight and binding           
          effect as final regulations.  Peterson Marital Trust v.                     
          Commissioner, 102 T.C. 790, 797 (1994), affd. 78 F.3d 795 (2d               
          Cir. 1996).                                                                 




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