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Commissioner, T.C. Memo. 2003-288, affd. 436 F.3d 1216 (10th Cir.
2006). Here, the notice of determination concerning collection
action was attached to the petition. Respondent acknowledged on
brief that this was a “Petition for Lien or Levy Action under
Code Section 6320(c) or 6330(d).” Further, respondent
contemplated a challenge to the Appeals officer’s rejection of
petitioner’s OIC, which was the only subject of the hearing. So,
respondent cannot be considered surprised or prejudiced by the
Court’s consideration of this issue.
We must therefore decide whether respondent’s rejection of
petitioner’s offer-in-compromise was an abuse of discretion.
Section 7122 provides respondent with the authority to grant an
offer-in-compromise as an alternative to collection action.
Respondent grants an OIC when there is a doubt as to the actual
tax liability, doubt as to collectibility, or for other purposes
relating to effective tax administration. Sec. 301.7122-1,
Proced. & Admin. Regs.; 1 Administration, Internal Revenue Manual
(CCH), sec. 5.8.1.1.2, at 16,253.
Petitioner’s offer based on doubt as to collectibility was
taken under consideration by respondent’s offer specialist.
Doubt as to collectibility “exists in any case where the
taxpayer’s assets and income are less than the full amount of the
liability.” Sec. 301.7122-1(b)(2), Proced. & Admin. Regs.
Evaluation of an OIC based on doubt as to collectibility requires
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