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Regs. If a taxpayer does not qualify for the just stated
effective tax administration compromise on grounds of economic
hardship, and does not qualify for an offer-in-compromise due to
doubt as to either liability or collectibility, the regulations
also allow the Commissioner to compromise a tax liability to
promote effective tax administration when the taxpayer identifies
compelling considerations of public policy or equity. See sec.
301.7122-1(b)(3)(ii), Proced. & Admin. Regs.
Petitioners made their offer-in-compromise due to doubt as
to collectibility with special circumstances and to promote
effective tax administration. Petitioners reported on their Form
433-A that their reasonable collection potential was $140,462
(i.e., their assets’ total reported current value of $144,322 -
their $3,860 Buick LeSabre which was fully encumbered by debt).
Cochran determined petitioners’ reasonable collection potential
by way of alternative calculations. Under each of those
calculations, petitioners cannot fully pay their approximately
$400,000 tax liability and thus do not qualify for an offer-in-
compromise to promote effective tax administration. See sec.
301.7122-1(b)(3), Proced. & Admin. Regs.; cf. Fargo v.
Commissioner, 447 F.3d 706 (9th Cir. 2006) (taxpayers made an
offer-in-compromise to promote effective tax administration where
they had sufficient assets to pay their tax liability in full).
As to petitioners’ offer-in-compromise due to doubt as to
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