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collectibility with special circumstances, the Commissioner
evaluates such an offer by applying the same factors (economic
hardship or considerations of public policy or equity) as in the
case of an offer-in-compromise to promote effective tax
administration. See IRM sec. 5.8.11.2.1 and .2. In accordance
with the Commissioner’s guidelines, an offer-in-compromise due to
doubt as to collectibility with special circumstances should not
be accepted even when economic hardship or considerations of
public policy or equity circumstances are identified, if the
taxpayer does not offer an acceptable amount. See IRM sec.
5.8.11.2.1.11 and .12.
Cochran considered all of the evidence submitted to her by
petitioners and applied the guidelines for evaluating an
offer-in-compromise due to doubt as to collectibility with
special circumstances or to promote effective tax administration.
As to the former, Cochran determined that petitioners’ offer was
unacceptable because they were able to pay more than the $32,000
that they offered to compromise their tax liability. As to the
latter, Cochran determined that petitioners’ offer did not
qualify as an offer-in-compromise to promote effective tax
administration because petitioners were unable to pay their
liability in full. Cochran’s determination to reject
petitioners’ offer-in-compromise was not arbitrary, capricious,
or without a sound basis in fact or law, and it was not abusive
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