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this provision of the IRM, the Appeals officer was not exercising
discretion at all but instead enunciating a bright-line rule for
all postdischarge bankruptcy cases where the Commissioner is
waiting for a distribution. See Estate of Roski v. Commissioner,
128 T.C. 113 (2007) (holding that by requiring all estates to
post a bond to make a section 6166 election regardless of the
facts before him, the Commissioner was adopting a bright-line
policy that trumped the exercise of his discretion).
Mr. Conte’s use of the IRM was not, however, a de facto
enunciation of a bright-line rule that trumped the exercise of
discretion. In evaluating an offer-in-compromise under doubt as
to collectibility, the Commissioner must first determine the
reasonable collection potential on the amount owed. Rev. Proc.
2003-71, sec. 4.02(2). In the ordinary circumstance, the
Commissioner calculates the reasonable collection potential by
determining the excess of a taxpayer’s assets and future income
above certain allowances for basic living expenses. See Klein v.
Commissioner, T.C. Memo. 2007-325. The guidelines aid the
Commissioner in this endeavor. Id.; see also, e.g., McDonough v.
Commissioner, T.C. Memo. 2006-234; Etkin v. Commissioner, T.C.
Memo. 2005-245; Schulman v. Commissioner, T.C. Memo. 2002-129. A
pending bankruptcy petition changes this collection analysis
because the taxpayer has surrendered his assets to the bankruptcy
court. Thus, where a taxpayer has filed for bankruptcy, the
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