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Regs. If a taxpayer does not qualify for the just stated
effective tax administration compromise on grounds of economic
hardship, and does not qualify for an offer-in-compromise due to
doubt as to either liability or collectibility, the regulations
also allow the Commissioner to compromise a tax liability to
promote effective tax administration when the taxpayer identifies
compelling considerations of public policy or equity. See sec.
301.7122-1(b)(3)(ii), Proced. & Admin. Regs.
Petitioners made their offer-in-compromise due to doubt as
to collectibility with special circumstances and to promote
effective tax administration. Petitioners reported on their Form
433-A that they had assets worth $169,650 (i.e., their assets’
total reported current value of $177,598 minus a $7,948
encumbrance on their VW Passat). Cochran determined petitioners’
reasonable collection potential to be $193,438. Therefore,
petitioners cannot fully pay their estimated $575,000 tax
liability and thus do not qualify for an offer-in-compromise to
promote effective tax administration. See sec. 301.7122-1(b)(3),
Proced. & Admin. Regs.; cf. Fargo v. Commissioner, 447 F.3d 706
(9th Cir. 2006) (taxpayers made an offer-in-compromise to promote
effective tax administration where they had sufficient assets to
pay their tax liability in full). As to petitioners’ offer-in-
compromise due to doubt as to collectibility with special
circumstances, the Commissioner evaluates such an offer by
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