- 19 - bankruptcy and the effect accepting a compromise would have on respondent’s distribution. Ultimately, Mr. Conte concluded that respondent was likely to receive approximately $20,000 of the $25,000 remaining in the bankruptcy. Further, as advised by counsel, Mr. Conte concluded that accepting the offer-in- compromise risked respondent’s claims in the bankruptcy estate. Thus, in accordance with the IRM and advice from counsel, Mr. Conte determined that petitioners’ offer-in-compromise was inadequate because it was less than what respondent expected to receive from the bankruptcy trustee and because accepting that offer would place that distribution at risk. Petitioners argue that respondent’s rejection of the offer- in-compromise was based on an erroneous conclusion of law that the bankruptcy distribution was at risk. Petitioners argue that respondent’s distribution from the bankruptcy was never at risk. If respondent’s determination was based upon an erroneous conclusion of law, we must reject that view and find that respondent abused his discretion. See Swanson v. Commissioner, 121 T.C. 111, 119 (2003). As respondent’s counsel now explains, an offer-in-compromise must include all of the outstanding liabilities of the taxpayer. Further, section 6325(a) provides that the Commissioner “shall issue a certificate of release of any lien imposed with respect to any internal revenue tax” not later than 30 days after thePage: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: March 27, 2008