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After making adjustments to petitioners’ monthly expenses,
respondent determined that $145,222 was collectible from
petitioners’ future income.7 Because petitioners’ State tax debt
would be satisfied by July 2007, respondent determined that there
was an “amount collectible from retired debt” over the period
remaining on the collection statute of $14,924. Respondent
concluded that petitioners had a reasonable collection potential
of $394,318.
Because petitioners had the ability to pay substantially
more than the amount offered, respondent rejected their offer-in-
compromise based on doubt as to collectibility with special
circumstances. Respondent also rejected their effective tax
administration offer-in-compromise based on economic hardship
because they had the ability to pay their tax liability in full.
Finally, respondent rejected their 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 concluded that petitioners did not offer an
acceptable collection alternative, that all requirements of law
and administrative procedure had been met, and that the Federal
tax lien represented the most efficient means to protect the
7 Respondent determined that petitioners had monthly
disposable income of $1,886 and multiplied this by 77, the number
of months remaining on the collection statute.
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Last modified: May 25, 2011