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for evaluating whether an installment agreement will facilitate
collection. See 2 Administration, Internal Revenue Manual (CCH),
sec. 5.15.1 to 5.15.1.36.3, with exhibits, at 17,653-17,745.
These procedures operate through an analysis of the taxpayer’s
current financial system, comparing monthly income to allowable
expenses. See id. This Court has held that reliance on IRM
guidelines in evaluating an installment agreement does not
constitute an abuse of discretion in the context of collection
proceedings. E.g., Orum v. Commissioner, 123 T.C. 1, 13 (2004),
affd. 412 F.3d 819 (7th Cir. 2005); Etkin v. Commissioner, T.C.
Memo. 2005-245; Castillo v. Commissioner, T.C. Memo. 2004-238;
Schulman v. Commissioner, T.C. Memo. 2002-129.
Section 7122(a), as pertinent here, authorizes the Secretary
to compromise any civil case arising under the internal revenue
laws. Regulations promulgated under section 7122 set forth three
grounds for compromise of a liability: (1) Doubt as to
liability, (2) doubt as to collectibility, or (3) promotion of
effective tax administration. Sec. 301.7122-1(b), Proced. &
Admin. Regs. With respect to the third-listed ground, a
compromise may be entered into to promote effective tax
administration where: (1)(a) Collection of the full liability
would cause economic hardship; or (b) exceptional circumstances
exist such that collection of the full liability would undermine
public confidence that the tax laws are being administered in a
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Last modified: May 25, 2011