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petition erroneously alleged that both petitioners appealed all
three notices, but only petitioner husband is the recipient of
the October 20, 2003, notice of lien and the July 2, 2004, notice
of levy and of the determinations relating to those notices.)
Their challenge to the notices is that the settlement officer
abused his discretion in requiring an increased OIC of their
outstanding liabilities.
Petitioners contend, among other things, that the notices of
determination sustaining two liens and a levy were an abuse of
discretion because the settlement officer failed to consider
evidence of “changed circumstances” presented by petitioners
before the notices of determination were issued and “in choosing
to not further investigate this change of circumstance caused by
a new overtime policy change”. Respondent contends that the
faxes sent in July 2006 merely reiterated the employer’s policy
in effect in 2004 and that the settlement officer considered that
policy in adjusting the amount of an acceptable OIC based on
averaging petitioner’s earnings for the prior 5 years of his
employment.
The review applicable in cases such as this one was stated
in Murphy v. Commissioner, 125 T.C. 301, 320 (2005), affd. 469
F.3d 27 (1st Cir. 2006), as follows:
We do not conduct an independent review of what
would be an acceptable offer in compromise. Fowler v.
Commissioner, T.C. Memo. 2004-163. The extent of our
review is to determine whether the Appeals officer’s
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