Tax News

CCH (cch.taxgroup.com) reports:

An IRS Appeals officer abused her discretion by including the full amount of an individual's dissipated assets in his net realizable equity (NRE) during her evaluation of his offer-in-compromise. The court concluded that the individual's NRE should not have included amounts paid for: attorney's fees incurred in the representation in his tax case; attorney's fees incurred in a civil lawsuit he filed for unpaid wages; an estimated tax payment made for one of the tax years at issue; and a lump-sum payment of delinquent child support. The case was remanded to Appeals for 60 days, during which time the individual had the opportunity to amend his offer based on the revised amount of his tax liability and in consideration of his available monthly income.
D.L. Samuel, TC Memo. 2007-312, Dec. 57,141(M)
Other References:
Code Sec. 7122
CCH Reference - 2007FED ¶41,130.175
Tax Research Consultant
CCH Reference - TRC IRS: 42,120
CCH Reference - TRC IRS: 51,056.25