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questions concerning whether the tax liability will be collected
in full, as in petitioners’ case, and where the offered amount
reflects realistic collection potential. 1 Administration,
Internal Revenue Manual (CCH), sec. 5.8.1.1.3, at 16,253.
We conclude that respondent’s rejection of the OIC was
reasonable in light of petitioners’ collection potential. The
Appeals officer followed prescribed guidelines based on section
7122(c)(1) to determine whether the $2,000 OIC was acceptable.
The Appeals officer permitted petitioners national and local
allowances in accordance with section 7122(c)(2). Respondent
based his calculation of Mr. Alaniz’s future net income on the
amount found in petitioners’ 2001 Schedule C less allowable
expenses. The parties disagree about the exact value of the Ford
Thunderbird, but we agree with respondent that liquidation of the
automobile will generate more than $2,000 without rendering
petitioners penniless. The Appeals officer valued the car at
$11,000, which, while not conclusive, is sufficient to create
serious questions as to petitioners’ valuation of the asset.
The record shows that the Appeals officer considered Mr.
Alaniz’s age and health. Cf. sec. 301.7122-1(c)(3)(i)(A),
Proced. & Admin. Regs., relating to effective tax administration.
The Appeals officer noted that Mr. Alaniz remains active in the
insurance business despite his age and medical conditions. No
evidence of petitioners’ “deteriorating” health was given to the
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Last modified: May 25, 2011