Joseph G. Dostal - Page 15

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                  In this case, petitioner’s position is that                         
             respondent abused his discretion in the subject notice                   
             of determination, which sustained the proposed collection                
             action for 2000 and 2001, because respondent refused to                  
             process petitioner’s offer-in-compromise.  Thus, the only                
             issue in this case involves a collection alternative,                    
             petitioner’s offer-in-compromise.  We review the                         
             determination for an abuse of discretion because the                     
             underlying tax liability is not at issue.  Lunsford v.                   
             Commissioner, 117 T.C. 183, 185 (2001); Nicklaus v.                      
             Commissioner, 117 T.C. 117, 120 (2001).                                  
                  Section 7122(a) authorizes the Secretary to compromise              
             any civil case arising under the internal revenue laws.                  
             The regulations set forth three grounds for the 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.; see sec. 7122(c)(1).  Neither doubt as to liability               
             nor doubt as to collectibility is at issue in the instant                
                  The Secretary may compromise a liability to promote                 
             “effective tax administration” when:  (1) Collection of the              
             full liability would cause the taxpayer economic hardship                
             within the meaning of section 301.6343-1, Proced. & Admin.               

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