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OPINION
COHEN, Judge: This case is before the Court on respondent’s
motion for summary judgment, seeking a determination sustaining
an Appeals officer’s rejection of petitioners’ offer in
compromise. Petitioners seek a summary determination that it was
an abuse of discretion to refuse their offer in compromise
because of the unfair application of the alternative minimum tax
(AMT) based on their exercise of incentive stock options (ISOs)
where the stock acquired by exercise of the ISOs has lost
substantially all of its value subsequent to the acquisition of
the stock. Unless otherwise indicated, all section references
are to the Internal Revenue Code as amended, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
Background
In ruling on respondent’s motion for summary judgment,
factual inferences are viewed in the light most favorable to
petitioners. Preece v. Commissioner, 95 T.C. 594, 597 (1990).
Thus, the background facts set forth herein are based primarily
on petitioners’ declaration in opposition to the motion for
summary judgment and on other materials submitted by petitioners.
Petitioners resided in Ely, Iowa, at the time that they
filed their petition. For some years prior to 2000, petitioner
Ronald J. Speltz (petitioner) was employed by McLeodUSA (McLeod).
By 2000, petitioner was a senior manager at McLeod earning wages
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Last modified: May 25, 2011