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dissipated assets during consideration of the offer-in-
compromise. The notice acknowledged the $15,600 payment to the
IRS but pointed out that the remaining $117,558 was distributed
to other creditors. It noted that petitioner was given the
opportunity to increase his offer but declined to do so. The
notice also stated that
The proposed levy action balances the need for
efficient collection with the concern that it be no
more intrusive than necessary because your offer-in-
compromise does not outweigh the government’s need for
efficient collection of your tax liabilities. Your
collection alternative was considered however we find
that it is not a viable alternative given the facts and
evidence raised.
The settlement officer’s Appeals Case Determination (Case
Determination) reflects that in recommending petitioner’s offer
based on doubt as to collectibility be rejected, she calculated
petitioner’s future income potential plus his net realizable
equity (NRE) in assets to get the reasonable collection potential
for the case.
In determining petitioner’s NRE, the settlement officer
decided that petitioner had dissipated assets in disregard of his
tax liabilities when he sold his interest in FMC and when he
refinanced his home. She considered the assets dissipated
because petitioner realized the funds after his tax liabilities
for 1996-2002 had accrued and after the amounts due for 1997-2001
were assessed, and he used all of the funds to pay other
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Last modified: November 10, 2007