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petitioner paid no Federal income tax in 2003 and provided no
documentation regarding State taxes. Regarding the possible
future increases in expenses outlined in petitioner’s letter
explaining the offer amount, respondent determined that these
were “general projections from the taxpayers’ representative and
may never, in fact, be incurred” and thus did not take them into
account.
After making adjustments to petitioner’s monthly expenses,
respondent determined that $28,815 was collectible from
petitioner’s future income.8 Respondent concluded that
petitioner had the ability to pay $456,881.
Because petitioner had the ability to pay substantially more
than the amount offered, respondent rejected his offer-in-
compromise based on doubt as to collectibility with special
circumstances. Respondent also rejected petitioner’s effective
tax administration offer-in-compromise because he did not have
the ability to pay his outstanding tax liability in full.
Respondent concluded that petitioner did not offer an
acceptable collection alternative, that all requirements of law
and administrative procedure had been met, and that respondent
could proceed with the proposed collection action.
8 Respondent determined that petitioner had monthly
disposable income of $339 and multiplied this by 85, the number
of months remaining on the collection statute.
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Last modified: May 25, 2011