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administrative hearing or otherwise brought to the attention of
the Appeals Office. Magana v. Commissioner, 118 T.C. 488, 493
(2002); sec. 301.6320-1(f)(2), Q&A-F5, Proced. & Admin. Regs.
The sole collection alternative petitioner proposed was an
OIC.4 Section 7122(a) authorizes the Secretary to compromise any
civil case arising under the internal revenue laws. As is
relevant here, grounds for compromise of a liability include
doubt as to collectibility or promotion of effective tax
administration. Sec. 301.7122-1(b), Proced. & Admin. Regs.
Before discussing each of these grounds, we address
respondent’s contention, raised for the first time in his
pretrial memorandum, that petitioner’s failure to pay his 2002
tax liability rendered him noncompliant with Federal tax laws.
The Court has held that where a taxpayer is not currently in
compliance with Federal tax laws, a determination that the
taxpayer is not entitled to an OIC does not constitute abuse of
discretion. Rodriguez v. Commissioner, T.C. Memo. 2003-153; see
also Orum v. Commissioner, 412 F.3d 819, 821 (7th Cir. 2005),
affg. 123 T.C. 1 (2004). The Court also has held, however, that
4 Petitioner’s OIC does not address the taxable year 2002.
It is unclear whether he later proposed an OIC as a collection
alternative for that year. On the basis of our discussion and
resolution of the issue for decision, infra, the result in this
case will not change if we find that petitioner offered to
compromise his 2002 tax liability. We therefore assume, without
deciding, that the issue of an OIC for the taxable year 2002 was
raised and is properly before the Court.
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