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(2) A decision to reject an offer for public
policy reason(s) should be based on the fact that
public reaction to the acceptance of the offer could be
so negative as to diminish future voluntary compliance
by the general public. Decisions to reject offers for
this reason should be rare.
Example: Below are some examples of situations that may
warrant rejection based on a public policy decision.
The taxpayer has openly encouraged others to refuse to
comply with the tax laws.
Suspicion that the financial benefits of a criminal
activity are concealed or the criminal activity is
continuing.
(3) An offer will not be rejected for public
policy grounds solely because:
(a) It would generate considerable public
interest, some of it critical.
(b) A taxpayer was criminally prosecuted for tax
or non-tax violation.
(4) The rejection narrative should discuss the
specific public policy issues.
(5) Rejections of this type require the approval
of the SB/SE Compliance Area Director in the field or
SB/SE Compliance Services Field Director for COIC.
[Emphasis omitted.]
Policy statement P-5-89 does not specifically reference
“egregious past non-compliance”, but appears to provide that in
some cases it may be a legitimate basis for rejecting an offer
that exceeds the reasonable collection potential. However, IRM
sec. 5.8.7.6.1 provides that respondent should discuss and
document the specific public policy issues relevant to the case
in the rejection narrative. Respondent did not reference either
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Last modified: May 25, 2011