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First, contrary to petitioner’s assertion, the Appeals
officer did not suspend her consideration of the offer-in-
compromise because petitioner had failed to meet his filing
requirements. Rather, the Appeals officer took that action
after petitioner’s attorney disclosed that petitioner’s
unpaid tax liability for 2003 was $70,000. The Appeals
officer had no reason to doubt this disclosure and no way
of knowing that petitioner’s return, when it was filed
approximately 5 months later, would report an unpaid tax
liability of $5,160. In response to that disclosure, the
Appeals officer advised petitioner’s attorney that she
could no longer consider the offer-in-compromise because
petitioner had not complied with the “payment requirements”
for his 2003 return.
In this case, we cannot fault the Appeals officer for
her concern about the fact that petitioner had, according
to his attorney, allowed a substantial additional tax
liability to accrue for 2003 without payment. For example,
in Orum v. Commissioner, 412 F.3d 819, 821 (7th Cir. 2005),
affg. 123 T.C. 1 (2004), the court stated as follows:
It would not do the Treasury any good if
taxpayers used the money owed for 2004 to pay
taxes due for 1998, the money owned for 2005 to
pay taxes for 1999, and so on. That would spawn
more collection cycles yet leave a substantial
unpaid balance. The Service’s goal is to reduce
and ultimately eliminate the entire tax debt,
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