Donald Ertz - Page 15

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          reasonable collection potential due to public policy or equity              
          considerations.  See Internal Revenue Manual (IRM) sec.                     
          5.8.4.3(4).  However, in accordance with the Commissioner’s                 
          guidelines, an offer-in-compromise based on 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) and                
          .2(12).                                                                     
               The Secretary may also compromise a tax liability on the               
          ground of effective tax administration when:  (1) Collection of             
          the full liability will create economic hardship; or (2)                    
          exceptional circumstances exist such that collection of the full            
          liability would undermine public confidence that the tax laws are           
          being administered in a fair and equitable manner; and (3)                  
          compromise of the liability would not undermine compliance by               
          taxpayers with the tax laws.  Sec. 301.7122-1(b)(3), Proced. &              
          Admin. Regs.                                                                
               Petitioner proposed an offer-in-compromise based                       
          alternatively on doubt as to collectibility with special                    
          circumstances or effective tax administration, offering to pay              
          $157,824 to compromise his outstanding tax liabilities.                     
          Petitioner argued that collection of the full liability would               
          create economic hardship and would undermine public confidence              






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Last modified: May 25, 2011