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circumstances exist as defined in IRM 5.8.4.3,
Effective Tax Administration and Doubt as to
Collectibility with Special Circumstance, or IRM
5.8.11, Effective Tax Administration, the offer
may be accepted on the basis of hardship or Effec-
tive Tax Administration (ETA).[35]
Assuming arguendo, as petitioner argues, that the “future
income” component of petitioner’s RCP should have been calculated
by using his average monthly wage income for the seven-year
34(...continued)
that petitioner had based petitioner’s June 24, 2005 offer-in-
compromise on “Doubt as to Collectibility with Special Circum-
stance” or “Effective Tax Administration”, on the record before
us, we find that the settlement officer did not abuse the settle-
ment officer’s discretion in concluding that that offer-in-
compromise should be rejected on those grounds. Although peti-
tioner was 70 years old in September 2005 when the settlement
officer (and the second offer specialist) was considering peti-
tioner’s June 24, 2005 offer-in-compromise, petitioner was still
practicing law and did not claim that he had any health issues.
35See Murphy v. Commissioner, 125 T.C. 301, 309 (2005),
affd. 469 F.3d 27 (1st Cir. 2006), where we stated:
Special circumstances are (1) circumstances demonstrat-
ing that the taxpayer would suffer economic hardship if
the IRS were to collect from him an amount equal to the
reasonable collection potential of the case or (2) if
no demonstration of such suffering can be made, circum-
stances justifying acceptance of an amount less than
the reasonable collection potential of the case based
on public policy or equity considerations. IRM pt.
5.8.4.3.4 (Sept. 1, 2005) (Effective Tax Administration
and Doubt as to Collectibility with Special Circum-
stances). To demonstrate that compelling public policy
or equity considerations justify a compromise, the
taxpayer must be able to demonstrate that, due to
exceptional circumstances, collection of the full
liability would undermine public confidence that the
tax laws are being administered in a fair and equitable
manner. Sec. 301.7122-1(b)(3)(ii), Proced. & Admin.
Regs.
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