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In Orum v. Commissioner, 412 F.3d at 821, Judge Easterbrook
explained:
It would not do the Treasury any good if
taxpayers used the money owed for 2004 to pay
taxes due for 1998, the money owed for 2005
to pay taxes for 1999, and so on. That would
spawn more collection cycles yet leave a
substantial unpaid balance. The Service’s
goal is to reduce and ultimately eliminate
the entire tax debt, which can be done only
if current taxes are paid while old tax debts
are retired. * * *
Scharringhausen nevertheless claims that the Commissioner
violated his own Internal Revenue Manual (IRM) procedures in not
reconsidering the rejection of his OIC. The IRM, however, has no
force of law and gives no rights to taxpayers. Fargo v.
Commissioner, 447 F.3d 706, 713 (9th Cir. 2006), affg. T.C. Memo.
2004-13; Thoburn v. Commissioner, 95 T.C. 132, 141 (1990). And
we are puzzled by Scharringhausen’s insistence that the lien was
improperly sustained because his 2001-03 OIC was improperly
rejected, when he refused to have his 2001-04 offer considered as
a collection alternative. It is no abuse of discretion not to
consider what a taxpayer asks not to be considered.
Scharringhausen’s final argument is that “[t]he IRS’[s]
current processes continue to prevent taxpayers from utilizing
the Offer in Compromise by imposing barriers to entry and
unnecessarily returning offers.” This is not reason for finding
an abuse of discretion in this case--establishing a general
procedure for deciding when to accept OIC and when to proceed by
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Last modified: March 27, 2008