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At the hearing, taxpayers may raise challenges to “the
appropriateness of collection actions” and may make “offers of
collection alternatives, which may include the posting of a bond,
the substitution of other assets, an installment agreement, or an
offer-in-compromise.” Sec. 6330(c)(2)(A). The Appeals officer
must consider those issues, verify that the requirements of
applicable law and administrative procedures have been met, and
consider “whether any proposed collection action balances the
need for the efficient collection of taxes with the legitimate
concern of the person [involved] that any collection action be no
more intrusive than necessary.” Sec. 6330(c)(3)(C). As his
collection alternative, petitioner chose to make an offer-in-
compromise. In the case before us, petitioner disputes
respondent’s rejection of his offer-in-compromise.
Section 7122(a) authorizes the Secretary to compromise any
civil or criminal case arising under the internal revenue laws.
Section 7122(c) provides that the Secretary shall prescribe
guidelines for evaluation of whether an offer-in-compromise
should be accepted. The decision whether to accept or reject an
offer-in-compromise is left to the Secretary’s discretion. Fargo
v. Commissioner, 447 F.3d 706, 712 (9th Cir. 2006), affg. T.C.
Memo. 2004-13; sec. 301.7122-1(c)(1), Proced. & Admin. Regs.
The section 7122 regulations set forth three grounds for
compromise of a taxpayer’s liability. These grounds are doubt as
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Last modified: November 10, 2007