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On March 29, 2002, Mr. O’Connell provided documents to Mr.
Blais. Mr. Blais concluded that an OIC was possible, but
additional investigation was necessary and needed to be done at a
“lower level”. Mr. Blais did not feel comfortable determining a
settlement figure. That same day, Mr. Blais wrote petitioner’s
attorneys:
I can state with reasonable certainty that sufficient
resources do not appear to exist to liquidate the full
amount of the delinquent tax liability. Although, an
Offer in Compromise appears to be a likely method of
resolving the dispute; the information submitted so far
is not adequate to quantify an amount or a range of
amounts that appear acceptable. In order to fully
exhaust this method of resolution I propose to return
the Offer in Compromise portion of my case to the
Compliance function so they can fully develop and
quantify an equity/asset position. If an agreement
cannot be reached at that level the Offer may receive
additional consideration from Appeals.
The letter concluded: “The complex nature and numerous
transactions regarding the Offer in Compromise warrant additional
investigative work by the Compliance function prior to a
resolution acceptable by both parties.” Mr. Blais sent the OIC
to the “OIC group” for additional investigation.
On April 10, 2002, Mr. Blais prepared an Appeals case
memorandum. In the Appeals case memorandum, Mr. Blais wrote:
“There is no evidence that the taxpayer had 5 million dollars to
purchase trust property and finance the business dealings” and
that bankruptcy proceedings “did not uncover any assets or cash
that might have been available to start the type of entities now
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Last modified: May 25, 2011