Case: U.S. Tax Court Affirms IRS Decision Rejecting Taxpayer’s Offer-in-Compromise (T.C. Memo)

The U.S. Tax Court affirmed the IRS decision rejecting the taxpayer’s offer-in-compromise and sustaining proposed collection actions. Taxpayer, a small business, had unpaid employment and unemployment tax liabilities, but submitted an offer-in-compromise based on doubt as to collectibility. The settlement officer determined that the taxpayer’s reasonable collection potential was higher than the proposed amount, based on increased profits and asset equity, and rejected the offer. The court held the settlement officer did not abuse his discretion in rejecting the offer because it was substantially below the taxpayer’s reasonable collection potential. The court determined that the settlement officer properly verified that ...