Peter P. Baltic and Karen R. Baltic - Page 2
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Joe Alfred Izen, Jr., for petitioners.
Wesley J. Wong, for respondent.
HOLMES, Judge: The Code encourages taxpayers to settle their
differences with the IRS by compromise rather than litigation.
One type of compromise is a compromise based on doubt as to
liability, and that’s the kind that Peter and Karen Baltic
offered to the IRS. But they made their offer just as the IRS
was poised to begin seizing their property--and after they had
had a chance to contest their liability in our court. Section
63301 says that taxpayers like the Baltics can’t challenge their
“underlying tax liability.” The main question in this case--
which we’ve apparently never quite squarely answered--is whether
their making an offer-in-compromise based on doubt as to
liability (an OIC-DATL) is a challenge to the “underlying tax
In February 2003, the Commissioner sent the Baltics a notice
of deficiency saying they owed over $100,000 in income tax and
penalties for 1999. The Baltics don’t dispute that they received
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
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Last modified: March 27, 2008