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these possible future expenses are general projections
from the taxpayers’ representative and may never, in
fact, be incurred. The present offer, therefore, must
be considered within the framework of present facts.
The taxpayers have an ability to pay substantially more
than the amount being offered, as per the guidelines of
Internal Revenue Manual 5.8.5.3.1. The taxpayers’
circumstances have been documented and considered but
are insufficient to permit acceptance of an offer
amount that is 18% of the RCP [reasonable collection
potential] ($35,000/$193,438).
As to petitioners’ offer-in-compromise to promote effective tax
administration, the notice states:
Analysis of the taxpayers’ finances shows that the
taxpayers’ equity in assets plus present and future
income are less than the assessed amounts to be
compromised. The taxpayers, therefore, fail to meet
the requirements for consideration of an offer in
compromise based on Effective Tax Administration, as
per the guidelines of Internal Revenue Manual
5.8.11.1(3).
The notice further states as to Cochran’s balancing of efficient
collection with the legitimate concerns of taxpayers that
The taxpayers’ concerns about the proposed collection
action generally fall within two areas: (1) pending
litigation (the innocent spouse case and the interest
abatement case) and (2) a viable collection alternative
in the form of their $35,000 offer in compromise.
The Settlement Officer has balanced the taxpayers’
first area of concern by researching both cases. The
Settlement Officer confirmed that on February 25, 2005
a stipulation has [sic] been entered into [sic] Tax
Court regarding the taxpayer-wife’s innocent spouse
case. In that stipulation, with [sic] the taxpayer-
wife conceding [sic] that she is not entitled to relief
under IRC � 6015(b), (c), or (f), and that she waives
the restrictions of IRC � 6015(e)(1)(B)(i). The
Settlement Officer also researched the taxpayers’
interest abatement case and was unable to locate
evidence that this case has been considered by IRS to
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Last modified: May 25, 2011