- 23 - Commissioner stands to collect as a creditor in the bankruptcy proceeding in addition to possibly collecting from the taxpayer directly from future income and assets not subject to the bankruptcy. Thus, at first, the IRM instructs a settlement officer to consider the Commissioner’s standing as a creditor in the bankruptcy and advises that an acceptable offer-in-compromise include the amount the Commissioner reasonably expects to recover from the bankruptcy. 1 Administration, IRM (CCH), pt. 5.8.10.2.3(2). In other words, the Appeals officer should not accept an offer of $5 when doing so will risk the likely receipt of $10 down the road. Second, the IRM instructs that an acceptable offer-in-compromise should also include the amount that “can be collected from the taxpayer on non-discharged liabilities or from property outside the bankruptcy.” Id. Thus, if the Commissioner stands to receive $10 as a creditor in the bankruptcy and, in addition, $5 can be collected directly from the taxpayer, then the reasonable collection potential is not $5 or even $10, but more like $15. Mr. Conte did not have to reach the second part of this analysis––the amount respondent could collect from petitioners outside of the bankruptcy. The $9,024.25 offer-in-compromise from petitioners was less than the $20,000 Mr. Conte expected respondent would receive from the bankruptcy, and he determinedPage: Previous 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: March 27, 2008