Donald A. and Virginia M. Singer - Page 6

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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              
                                                             (continued...)           





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