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unsecured debts. Respondent asserts that the Federal tax lien
has priority over these debts and that credit card payments are
not necessary expenses properly allowable under IRM guidelines.
Finally, respondent contends that: (1) Petitioner’s future
income available to pay taxes (monthly gross income less
necessary expenses, not including the credit card payments) is
sufficient to pay his tax liability in full before the end of the
statutory period for collections; (2) because petitioner can
fully pay the tax liability, he is not eligible for an offer-in-
compromise; and (3) it was not an abuse of discretion for the AO
to confirm the rejection of the OIC, to propose an installment
agreement as the available collection alternative, and to sustain
the collection action.
Section 6321 imposes a lien in favor of the United States on
all property and rights to property of a taxpayer when the
Secretary demands payment of the taxpayer’s tax liability and the
taxpayer fails to pay those taxes. Such a lien arises when an
assessment is made. Sec. 6322. Section 6323(a) requires the
Secretary to file a notice of Federal tax lien if the lien is to
be valid against any purchaser, holder of a security interest,
mechanic’s lienor, or judgment lien creditor. Lindsay v.
Commissioner, T.C. Memo. 2001-285, affd. 56 Fed. Appx. 800 (9th
Cir. 2003).
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Last modified: March 27, 2008