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Because petitioners had the ability to pay substantially
more than the amount offered, respondent rejected their offer-in-
compromise based on doubt as to collectibility with special
circumstances. Respondent also rejected petitioners’ effective
tax administration offer-in-compromise based on economic hardship
because they had the ability to pay their tax liability in full.
Finally, respondent rejected petitioners’ effective tax
administration offer-in-compromise based on public policy or
equity ground because the case “fails to meet the criteria for
such consideration”.
Respondent determined that petitioners did not offer an
acceptable collection alternative and that all requirements of
law and administrative procedure had been met. Respondent
concluded that the proposed collection action could proceed, but
that any activity against Mr. Andrews’s assets should be stayed
until his pending innocent spouse case had been decided.
In response to the notice of determination, petitioners
filed a petition with this Court on September 27, 2004.
OPINION
Section 7122(a) provides that “The Secretary may compromise
any civil * * * case arising under the internal revenue laws”.
Whether to accept an offer-in-compromise is left to the
Secretary’s discretion. Fargo v. Commissioner, 447 F.3d 706, 712
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Last modified: May 25, 2011