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applying the same factors (economic hardship or considerations of
public policy or equity) as in the case of an offer-in-compromise
to promote effective tax administration. See IRM sec. 5.8.11.2.1
and .2. In accordance with the Commissioner’s guidelines, an
offer-in-compromise due to doubt as to collectibility with
special circumstances should not be accepted even when economic
hardship or considerations of public policy or equity
circumstances are identified, if the taxpayer does not offer an
acceptable amount. See IRM sec. 5.8.11.2.1(11).
Cochran considered all of the evidence submitted to her by
petitioners and applied the guidelines for evaluating an
offer-in-compromise due to doubt as to collectibility with
special circumstances or to promote effective tax administration.
As to the former, Cochran determined that petitioners’ offer was
unacceptable because they were able to pay more than the $35,000
that they offered to compromise their tax liability. As to the
latter, Cochran determined that petitioners’ offer did not
qualify as an offer-in-compromise to promote effective tax
administration because petitioners were unable to pay their
liability in full. Cochran’s determination to reject
petitioners’ offer-in-compromise was not arbitrary, capricious,
or without a sound basis in fact or law, and it was not abusive
or unfair to petitioners. Cochran’s determination was based on a
reasonable application of the guidelines, which we decline to
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