Chi Wai - Page 8

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                         Appeals will not consider the                                
                         principles under IRC 6015(f) in                              
                         determining whether or not the ETA-                          
                         OIC should be accepted from Mrs.                             
                         Wai.                                                         
               The offer is being rejected without further consideration by           
               Appeals at this time.                                                  
               During the pendency of petitioner’s CDP matter before                  
          respondent’s settlement officer, petitioner’s counsel was in                
          contact with other Government officials (of which he kept the               
          Settlement Officer and her superior informed) in an attempt to              
          obtain collateral relief for petitioner from her AMT liability.             
          At various times, counsel was in contact with the National                  
          Taxpayer Advocate’s Office, and with the Assistant Secretary of             
          Treasury for Tax Policy.                                                    
               By letter dated October 28, 2004, Commissioner of Internal             
          Revenue Mark W. Everson advised Senators Grassley and Baucus                
          that, as of that date, no formal guidance had been issued by the            
          IRS to its employees specifically pertaining to the compromise of           
          liabilities attributable to the AMT arising from the exercise of            
          ISOs.                                                                       
                                     Discussion                                       
               The facts in this case giving rise to the AMT almost exactly           
          parallel those of Speltz v. Commissioner, 124 T.C. 165 (2005),              
          affd. 454 F.3d 782 (8th Cir. 2006).  In each case, the taxpayer             
          exercised ISOs during the year 2000, and reported on the                    
          respective Federal tax returns, for purposes of the AMT, an                 





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