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occasions. Following one such contact, Mr. Conte received an e-
mail informing him that “Mr. Salazar owes: IMF $13,977.92 and BMF
$62,786.01 for a total of $76,763.93. The amount that will come
to IRS from the trustee’s office * * * [$25,000 less trustee
expenses] will not full-pay the account (less than 1/3 of balance
due). Collection will not be withheld.”2
According to his case record, Mr. Conte was concerned that
accepting an offer-in-compromise while awaiting a final
distribution from the bankruptcy might jeopardize respondent’s
claims to that distribution. Mr. Conte performed research,
including reviewing the Internal Revenue Manual (IRM), to assist
with his consideration of petitioners’ offer-in-compromise. Mr.
Conte noted the IRM’s caution on accepting an offer-in-compromise
while awaiting a distribution of assets from a bankruptcy. Mr.
Conte also sought and received legal advice on the effect an
offer-in-compromise would have on the pending bankruptcy
distribution. Counsel from within the Internal Revenue Service
(IRS) advised Mr. Conte that acceptance of the offer-in-
compromise risked respondent’s claim to the distribution and that
the offer-in-compromise should be increased by the amount
respondent expected to receive from the bankruptcy.
2“IMF” refers to respondent’s Individual Master File for
petitioners’ income tax liabilities. “BMF” refers to
respondent’s Business Master File for Mr. Salazar’s employment
tax liabilities.
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Last modified: March 27, 2008