Robert M. Scharringhausen - Page 7




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          withdrawing the lien would simply cause the government to lose              
          its priority status against other creditors.2                               
          B.   Was It an Abuse of Discretion Not To Reconsider                        
               Rejection of Scharringhausen’s First OIC?                              
               Scharringhausen also contends that his offer to compromise             
          his 2001-03 taxes was improperly returned as “nonprocessable”               
          because he failed to pay his 2004 taxes.  He cites Chavez v.                
          United States, 93 AFTR 2d 2004-2386, at 2004-2391 (W.D. Tex.                
          2004) to support his contention that a “blanket” refusal to                 
          process an OIC for noncompliance is an abuse of discretion.  We,            
          however, have held that “reliance on a failure to pay current               
          taxes in rejecting a collection alternative does not constitute             
          an abuse of discretion.”  Giamelli v. Commissioner, 129 T.C. 107,           
          111-12 (2007).  And at least the Fifth, Sixth, and Seventh                  
          Circuits agree with us.  Christopher Cross, Inc., v. United                 
          States, 461 F.3d 610, 613 (5th Cir. 2006); Orum v. Commissioner,            
          412 F.3d 819, 821 (7th Cir. 2005), affg. 123 T.C. 1 (2004);                 
          Living Care Alternatives of Utica, Inc. v. United States, 411               
          F.3d 621, 630-31 (6th Cir. 2005).                                           



               2 The two other reasons for granting relief from the filing            
          of a NFTL are that the IRS didn’t follow proper procedures, sec.            
          6323(j)(1)(A), and that the taxpayer involved is current on an              
          installment agreement, sec. 6323(j)(1)(B).  The first is not                
          present here--the settlement officer reviewed the procedural                
          checklist and found the IRS had done its job correctly; the                 
          second doesn’t apply because Scharringhausen had no installment             
          agreement.                                                                  






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