- 13 -
(A) Taxpayer is incapable of earning a living
because of a long term illness, medical condition, or
disability, and it is reasonably foreseeable that
taxpayer’s financial resources will be exhausted
providing for care and support during the course of the
condition;
(B) Although taxpayer has certain monthly
income, that income is exhausted each month in
providing for the care of dependents with no other
means of support; and
(C) Although taxpayer has certain assets, the
taxpayer is unable to borrow against the equity in
those assets and liquidation of those assets to pay
outstanding tax liabilities would render the taxpayer
unable to meet basic living expenses.
The regulation states that no compromise may be entered into if
such compromise of liability would undermine compliance by the
taxpayer with the tax laws. Sec. 301.7122-1(b)(3)(iii), Proced.
& Admin. Regs. Paragraph (c)(3)(ii) then sets forth factors that
support (but are not conclusive of) a determination that a
compromise would undermine compliance with the tax laws. These
factors include: (A) A taxpayer who has a history of
noncompliance with the filing and payment requirements of the
Internal Revenue Code; (B) a taxpayer who has taken deliberate
action to avoid the payment of taxes; and (C) a taxpayer who has
encouraged others to refuse to comply with the tax laws. Sec.
301.7122-1(c)(3)(ii), Proced. & Admin. Regs. The regulation
continues:
(iii) The following examples illustrate the types
of cases that may be compromised by the Secretary, at
the Secretary’s discretion, under the economic hardship
provisions of paragraph (b)(3)(i) of this section:
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011