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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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