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income of $369,639;9 and (3) a reasonable collection
potential of $1,287,552.
Because petitioners had “the ability to pay all
assessed amounts and still have assets and an income stream
remaining worth over $536,000”, respondent determined that
they were not entitled to an effective tax administration
offer-in-compromise based on economic hardship.10
Respondent also determined that petitioners were not
entitled to an effective tax administration offer-in-
compromise based on public policy or equity ground because
the case “fails to meet the criteria for such
consideration”.
Respondent determined that petitioners did not offer an
acceptable collection alternative and that all requirements
of law and administrative procedure had been met.
Respondent concluded that the proposed collection action
could proceed, but that the final notice should be partially
rescinded as it related to Mrs. Freeman’s 1980 through 1985
tax years because of her pending innocent spouse case.
9 Respondent determined that petitioners had monthly
disposable income of $5,517 and multiplied that amount by 67, the
number of months remaining on the collection statute.
10 Petitioners do not argue that their effective tax
administration offer-in-compromise should have been accepted on
the ground of economic hardship. See infra note 12.
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