Peter P. Baltic and Karen R. Baltic - Page 2

                                        - 2 -                                         
               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.                                      

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  Next 

Last modified: March 27, 2008