Estate of Carol Andrews, Deceased, Robert Andrews, Special Administrator, and Robert Andrews - Page 12

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          (9th Cir. 2006), affg. T.C. Memo. 2004-13; sec. 301.7122-1(c)(1),           
          Proced. & Admin. Regs.                                                      
               The regulations under section 7122(a) set forth three                  
          grounds for the compromise of a tax 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.  Doubt as to liability is not at issue in this                 
               The Secretary may compromise a tax liability based on doubt            
          as to collectibility where the taxpayer’s assets and income are             
          less than the full amount of the assessed liability.  Sec.                  
          301.7122-1(b)(2), Proced. & Admin. Regs.  Generally, under the              
          Commissioner’s administrative pronouncements, an offer-in-                  
          compromise based on doubt as to collectibility will be acceptable           
          only if it reflects the taxpayer’s reasonable collection                    
          potential.  Rev. Proc. 2003-71, sec. 4.02(2), 2003-2 C.B. 517,              
          517.  In some cases, the Commissioner will accept an offer-in-              
          compromise of less than the reasonable collection potential if              
          there are “special circumstances”.  Id.  Special circumstances              
          are:  (1) Circumstances demonstrating that the taxpayer would               
          suffer economic hardship if the IRS were to collect from him an             
          amount equal to the reasonable collection potential; or (2)                 

               9  While petitioners dispute their liability for sec.                  
          6621(c) interest, see supra note 2, they did not raise doubt as             
          to liability as a ground for compromise.                                    

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