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Section 6330(c)(2)(A)(iii) allows a taxpayer to offer to
compromise a Federal tax debt as a collection alternative to a
proposed levy. Section 7122(c) authorizes the Commissioner to
prescribe guidelines to determine when a taxpayer’s offer-in-
compromise should be accepted. The applicable regulations,
section 301.7122-1(b), Proced. & Admin. Regs., list three grounds
on which the Commissioner may accept an offer-in-compromise of a
Federal tax debt. These grounds are “Doubt as to liability”,
“Doubt as to collectibility”, and to “Promote effective tax
administration”. Sec. 301.7122-1(b)(1), (2), and (3), Proced. &
Admin. Regs. Petitioners reported on their Form 433-A that they
had assets worth $311,994. Cochran determined that petitioners’
reasonable collection potential (taking into account their assets
as well as future income) was either $611,920 or $606,734.
Petitioners can afford to pay their estimated $260,143 tax
liability in full and do not argue that the liability is in
doubt. They seek to qualify for an offer-in-compromise to
promote effective tax administration. See sec. 301.7122-1(b)(3),
Proced. & Admin. Regs.; cf. Fargo v. Commissioner, 447 F.3d 706
10(...continued)
external evidence in the record of this case to prove that
Cochran abused her discretion by not considering facts and
documents that they had consciously decided not to give to her.
Consistent with Murphy v. Commissioner, supra, we sustained
respondent’s relevancy objections to the external evidence.
Accord Clayton v. Commissioner, T.C. Memo. 2006-188; Barnes v.
Commissioner, T.C. Memo. 2006-150.
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