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applicable law and administrative procedures have been met, and
consider “whether any proposed collection action balances the
need for the efficient collection of taxes with the legitimate
concern of the person [involved] that any collection action be no
more intrusive than necessary.” Sec. 6330(c)(3)(C). Here,
petitioners do not dispute that all administrative procedures
have been met so the sole issue for our consideration is whether
respondent’s rejection of petitioners’ OIC was an abuse of
discretion.
Section 7122 provides respondent with the authority to grant
an offer in compromise as an alternative to collection action.
Respondent grants an offer in compromise when there is a doubt as
to the actual tax liability, doubt as to collectibility, or for
other purposes relating to effective tax administration. Sec.
301.7122-1, Proced. & Admin. Regs.; 1 Administration, Internal
Revenue Manual (CCH), sec. 5.8.1.1.2, at 16,253.
The Appeals officer considered petitioners’ $2,000 offer on
the grounds of “doubt as to collectibility” (as such term is used
in the context of the foregoing reference to the regulations and
the Internal Revenue Manual). The Appeals officer also took into
consideration as a potential ground for compromise the promotion
of effective tax administration. See sec. 301.7122-1(b)(3),
Proced. & Admin. Regs. Respondent may accept an offer in
compromise based on doubt as to collectibility when there are
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Last modified: May 25, 2011