Gary W. McDonough - Page 10

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          decided.  The notice concluded petitioner’s $102,000 offer-in-              
          compromise was not an adequate collection alternative to the                
          proposed levy because petitioner had the ability to pay $448,762.           
               The notice, citing Internal Revenue Manual (IRM) sections              
 and, stated that petitioner’s offer did not           
          meet the Commissioner’s guidelines for consideration as an                  
          offer-in-compromise to promote effective tax administration.                
          Specifically, the notice stated:                                            
                    Considered under economic hardship, the taxpayer                  
               has the ability to pay all assessed amounts and still                  
               have assets remaining with equity worth over $200,000                  
               in addition to an income stream of over $350,000.  The                 
               taxpayer’s representative contended that the taxpayer                  
               was being evaluated for possible disability.  The                      
               Settlement Officer noted, however, that no actual                      
               disability has been documented to date.  The present                   
               offer, therefore, must be considered within the                        
               framework of present facts.  As such, the taxpayer                     
               failed to document economic hardship with or without                   
               special circumstances, in accordance with Internal                     
               Revenue Manual                                             

               When considered under public policy or equity grounds, the             
          taxpayer’s Effective Tax Administration offer proposal fails to             
          meet the criteria for such consideration under Internal Revenue             
          Manual  For the reasons set forth in No. 1 above, the           
          taxpayer’s offer as an Effective Tax Administration offer based             
          on public policy or equity grounds, therefore, cannot be                    
               In response to the notice of determination, petitioner filed           
          his petition with this Court on January 19, 2005.                           

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