Donald and Yvonne Clayton - Page 13

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          relevant to the question of whether the Appeals officer abused              
          her discretion.”  Murphy v. Commissioner, supra at 315.9                    
               Section 6330(c)(2)(A)(iii) allows a taxpayer to offer to               
          compromise a Federal tax debt as a collection alternative to a              
          proposed levy.  Section 7122(c) authorizes the Commissioner to              
          prescribe guidelines to determine when a taxpayer’s offer-in-               
          compromise should be accepted.  The applicable regulations,                 
          section 301.7122-1(b), Proced. & Admin. Regs., list three grounds           
          on which the Commissioner may accept an offer-in-compromise of a            
          Federal tax debt.  These grounds are “Doubt as to liability”,               
          “Doubt as to collectibility”, and to “Promote effective tax                 
          administration”.  Sec. 301.7122-1(b)(1), (2), and (3), Proced. &            
          Admin. Regs.                                                                


               9 In Murphy v. Commissioner, 125 T.C. 301 (2005), the Court            
          declined to include in the record external evidence relating to             
          facts not presented to Appeals.  The Court distinguished                    
          Robinette v. Commissioner, 123 T.C. 85 (2004), revd. 439 F.3d 455           
          (8th Cir. 2006), and held that the external evidence was                    
          inadmissible in that it was not relevant to the issue of whether            
          Appeals abused its discretion.  In a memorandum that petitioners            
          filed with the Court on Apr. 13, 2006, pursuant to an order of              
          the Court directing petitioners to explain the relevancy of any             
          external evidence that they desired to include in the record of             
          this case, petitioners made no claim that they had offered any of           
          the external evidence to Cochran.  Instead, as we read                      
          petitioners’ memorandum in the light of the record as a whole,              
          petitioners wanted to include the external evidence in the record           
          of this case to prove that Cochran abused her discretion by not             
          considering facts and documents that they had consciously decided           
          not to give to her.  Consistent with Murphy v. Commissioner,                
          supra, we sustained respondent’s relevancy objections to the                
          external evidence.  Accord Barnes v. Commissioner, T.C. Memo.               
          2006-150.                                                                   




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