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The Appeals Case Determination takes the position that
Appeals was not required to counteroffer petitioner’s offer-in-
compromise, but petitioner points out that 1 Administration,
Internal Revenue Manual (CCH), section 5.8.4.6., at 16,308,
provides that in the course of processing the case, if the
taxpayer’s offer must be increased in order to be recommended for
acceptance, the taxpayer must be contacted by letter or telephone
advising the taxpayer “to amend the offer to the acceptable
amount”. In the present case, petitioner should have been
advised that instead of 100 percent of the dissipated assets,
totaling $133,158, an acceptable amount would be $133,158 less
$26,064 ($15,600 plus $5,000 plus $5,464), or $107,094. Appeals’
failure to do so was an abuse of discretion, and we so hold.
Petitioner should be given the opportunity to revise his
offer-in-compromise to reflect the $107,094, referred to above.
However, since petitioner appears to lack any substantial assets
outside his medical practice which could provide a source for
paying any compromise amount, it is obvious, as previously
observed, that any payments would come from his medical earnings.
The table prepared by Appeals, above, unquestionably reveals that
petitioner has ample income in excess of his $30,000 offer
payable over 24 months.
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Last modified: November 10, 2007