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taxpayers to run those risks, thus undermining rather than
enhancing compliance with the tax laws.12
Third, petitioners argue that Driver failed to balance
efficient collection with the legitimate concern that collection
through the proposed levy be no more intrusive than necessary.
We disagree. Driver thoroughly considered this balancing issue
on the basis of the information and proposed collection
alternative (offer-in-compromise) given to her by petitioners.
She concluded that the proposed levy action was an appropriate
means for collecting the liabilities at issue. She thoroughly
considered petitioners’ arguments for accepting their offer-in-
compromise, and she rejected the offer only after concluding that
petitioners could pay more of their tax liability than the
$11,552 they offered. Cf. Internal Revenue Manual sec.
5.8.11.2.1(11) (“When hardship criteria are identified but the
taxpayer does not offer an acceptable amount, the offer should
not be recommended for acceptance”).
12 Nor does the fact that petitioners’ case may be
“longstanding” overcome the detrimental impact on voluntary
compliance that could result from respondent’s accepting
petitioners’ offer-in-compromise. An example in Internal Revenue
Manual sec. 5.8.11.2.2 implicitly addresses the “longstanding”
issue. There, the taxpayer invested in a tax shelter in 1983,
thereby incurring tax liabilities for 1981 through 1983. He
failed to accept a settlement offer by respondent that would have
eliminated a substantial portion of his interest and penalties.
Although the example, which is similar to petitioners’ case in
several respects, would qualify as a “longstanding” case by
petitioners’ standards, the offer was not acceptable because
acceptance of it would undermine compliance with the tax laws.
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Last modified: November 10, 2007