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discretion. See Sego v. Commissioner, supra at 610; Goza v.
Commissioner, 114 T.C. 176, 181-182 (2000).
Section 7122(a) authorizes the Secretary to compromise any
civil case arising under internal revenue laws. The Secretary
may compromise a liability for doubt as to collectibility when
“the taxpayer’s assets and income are less than the full amount
of the assessed liability.” Sec. 301.7122-1(b)(2), Proced. &
Admin. Regs.
Settlement Officer Alls reviewed petitioners’ submitted
financial information and determined that an offer in compromise
was not appropriate on the basis of doubt as to collectibility
because petitioners had the ability to pay the liability in full
over the life of the collection period.5 We conclude that
Settlement Officer Alls reasonably determined that petitioners
had sufficient income and assets to satisfy the tax liability.6
5The “Rejection Narrative Doubt as to Collectibility”
prepared by Settlement Officer Alls shows that petitioners had
Net Realizable Equity consisting of bank accounts, a pension
account, and real estate totaling $12,054.38. Petitioners’
monthly gross income was $5,089.50 and allowable expenses only
$4,404.93, leaving a net difference of $684.57. This indicates
an ability to pay more than $50,000 over the life of the
collection period, exceeding the liability of $33,006.31.
6We note that, at trial, petitioner presented no evidence of
increased expenses. Nevertheless, Settlement Officer Alls
testified that, at respondent’s request, she had reviewed
petitioners’ file before trial, and, even after she made
additional allowances for expenses, including interest on the
possible $10,000 line of credit and $50 more for insurance,
petitioners do not qualify for an offer in compromise based on
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