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are not destitute. The record reflects that petitioners own two
automobiles, one with a quick sale value of $10,120, subject to
an encumbrance of $921, and the other with a quick sale value of
$8,988, subject to an encumbrance of $5,700. Petitioners do not
dispute that these figures are correct. The Appeals officer
sustained the lien and suspended their account as “temporarily
not collectible”. There is no evidence that the Government is
currently taking any efforts to collect on petitioners’ account.
Section 301.7122-1(c)(3), Proced. & Admin. Regs., authorizes
the Internal Revenue Service, in compromising liabilities, to
take into account circumstances where payment in full would
create economic hardship. In this case, the Appeals officer
determined that petitioners did not have sufficient income to
enter an installment agreement. However, the regulations do not
require the Commissioner to relieve a liability completely
because the taxpayers are unable to pay the liability from
current income. Petitioners have not shown that they are unable
to pay at least a part of their liability from their remaining
assets. Their $100 de minimis offer effectively asks respondent
to forgive their entire liability, despite the value of their
assets. On the basis of the undisputed facts presented to the
Appeals officer, if petitioners were to sell one of their two
automobiles, they could pay the entire amount of the liability at
issue. Under these circumstances, we cannot find an abuse of
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Last modified: May 25, 2011