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SEC. 7122(c). Standards for Evaluation of
Offers.--
(1) In general.–-The Secretary shall
prescribe guidelines for officers and employees of
the Internal Revenue Service to determine whether
an offer-in-compromise is adequate and should be
accepted to resolve a dispute.
(2) Allowances for basic living expenses.--
(A) In general.–-In prescribing
guidelines under paragraph (1), the Secretary
shall develop and publish schedules of
national and local allowances designed to
provide that taxpayers entering into a
compromise have an adequate means to provide
for basic living expenses.
(B) Use of schedules.–-The guidelines
shall provide that officers and employees of
the Internal Revenue Service shall determine,
on the basis of the facts and circumstances
of each taxpayer, whether the use of the
schedules published under subparagraph (A) is
appropriate and shall not use the schedules
to the extent such use would result in the
taxpayer not having adequate means to provide
for basic living expenses.
(3) Special rules relating to treatment of
offers.–-The guidelines under paragraph (1) shall
provide that--
(A) an officer or employee of the
Internal Revenue Service shall not reject an
offer-in-compromise from a low-income
taxpayer solely on the basis of the amount of
the offer; and
(B) in the case of an offer-in-
compromise which relates only to issues of
liability of the taxpayer--
(i) such offer shall not be
rejected solely because the Secretary is
unable to locate the taxpayer’s return
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Last modified: May 25, 2011