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concluded, petitioners’ net realizable equity in assets and
future income equaled $611,920 or alternatively $606,734.
On May 12, 2005, Appeals issued petitioners a notice of
determination sustaining the proposed levy. The notice concludes
that petitioners’ $90,258 offer-in-compromise is not an
appropriate collection alternative to the proposed levy. The
notice, citing Internal Revenue Manual (IRM) sections 5.8.11.2.1
and 5.8.11.2.2, states that petitioners’ offer does not meet the
Commissioner’s guidelines for consideration as an offer-in-
compromise to promote effective tax administration on the basis
of economic hardship or equity and public policy. Cochran noted
that since petitioners’ representative had not specified the
basis on which they were making their effective tax
administration offer, she considered it under both economic
hardship and equity and public policy grounds.
As to petitioners’ offer-in-compromise to promote effective
tax administration due to economic hardship, the notice states
that “the taxpayers have the ability to meet all their necessary
living expenses and to pay all amounts owed from either their
equity in assets or their income stream and still have equity and
income”. As to petitioners’ offer-in-compromise to promote
effective tax administration based on equity and public policy,
9(...continued)
Revenue Manual (IRM) sec. 5.8.5.5.
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