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The rejection of this Offer has been sustained by
Appeals for the following reasons:
1. It is the current position of Appeals that
Offers submitted based solely on the merits
of the ISO-AMT issue, do NOT qualify for
consideration under the principles of ETA.
Currently there is no provision in the law
that allows consideration of ETA-OIC’s due to
AMT on stock options. Our position remains
that Congress must enact a change in the law
with respect to the AMT on stock options
before we will give consideration to the
merits of an offer submitted under ETA based
solely on this issue. We will NOT set
precedent at this time with reviewing or
accepting ETA-OIC’s based on the ISO-AMT
issue until a change in the law has been
made. Appeals also has no authority at this
time to suspend any of these ETA-OIC’s
currently in inventory until such time, if
any, that a change in the law is made. And
secondly,
2. Mr. Harper’s request to have the ETA-OIC
viewed in light of the provisions of IRC
6015(f) is flawed. The fact that if the
taxpayer’s[sic] had filed jointly would
have significantly reduced the amount of
Mrs. Wai’s AMT tax does not negate the
fact that they voluntarily chose to file
separately for tax year 2000, thus
creating a larger tax burden for
themselves individually. As previously
discussed with Mr. Harper, the
Wai’s[sic] still have the ability to
amend their 2000 returns by filing a
joint return, and thus reducing the
amount of AMT tax that Mrs. Wai is
asking the IRS to compromise. In
addition, Mrs. Wai would then be in a
position to request relief under the
Innocent Spouse provisions, in which Mr.
Harper believes she would prevail.
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Last modified: May 25, 2011