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Section 6330(c)(2)(A)(iii) allows a taxpayer to offer to
compromise a Federal tax debt as a collection alternative to a
proposed levy. Section 7122(c) authorizes the Commissioner to
prescribe guidelines to determine when a taxpayer’s offer-in-
compromise should be accepted. The applicable regulations,
section 301.7122-1(b), Proced. & Admin. Regs., list three grounds
on which the Commissioner may accept an offer-in-compromise of a
Federal tax debt. These grounds are “Doubt as to liability”,
“Doubt as to collectibility”, and to “Promote effective tax
administration”. Sec. 301.7122-1(b)(1), (2), and (3), Proced. &
Admin. Regs.
Petitioners argue in brief that Appeals (acting through
Driver) abused its discretion by not accepting their offer to
compromise their tax liability on the ground of effective tax
administration in that, they assert, Driver did not adequately
6(...continued)
relevant to the issue of whether Appeals abused its discretion.
In a memorandum that petitioners filed with the Court on
April 13, 2006, pursuant to an order of the Court directing
petitioners to explain the relevancy of any external evidence
that they desired to include in the record of this case,
petitioners made no claim that they had offered any of the
external evidence to Driver. Instead, as we read petitioners’
memorandum in the light of the record as a whole, petitioners
wanted to include the external evidence in the record of this
case to prove that Driver abused her discretion by not
considering facts and documents that they had consciously decided
not to give to her. Consistent with Murphy v. Commissioner,
supra, we sustained respondent’s relevancy objections to the
external evidence.
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Last modified: November 10, 2007