In Uncategorized on 06/06/2019 at 16:17

No, not Sam T. Coleridge’s “greybeard loon” having a mix-and-match. This is a designated hitter from Judge Buch off a CDP, John M. Annesi & Cheryl L. Annesi, Docket No. 988-18L, filed 6/6/19.

The major wrangle here is John’s & Cheryl’s RCP. IRS wanted to grab $92K, John & Cheryl offered an ETA OIC of $2500, which got bounced when the OIC offer specialist decided that they had a $385K RCP, based on their most recent return.

I’ll let Judge Buch take it from here.

“To determine their RCP, the offer specialist relied on information from the Annesis’ most recently filed return and calculated their monthly income based on this one year of income. The offer specialist rejected the Annesis’ offer-in-compromise because she concluded that the Annesis were able to pay the liability in full and that their special circumstances did not warrant a hardship.

“The offer-in-compromise was sent to a settlement officer for the Annesis’ appeal of the offer specialist’s decision. During the hearing with the settlement officer, the Annesis’ representative would not accept an installment agreement because she asserted that the Annesis were unable to make the payments. After the hearing, the Annesis’ representative sent a fax to the settlement officer, asserting that the Internal Revenue Manual allows for the past three years of income to be averaged in calculating the Annesis’ monthly income to determine their RCP.” Order, at p. 2.

One or three, it’s all one. On the three-year recount, the SO comes up with a $198K RCP.

“While the parties do not dispute the liability, the Annesis attempt to raise doubt as to collectability by claiming the Commissioner incorrectly calculated their RCP. The Commissioner may reject an offer-in-compromise when the taxpayer’s RCP is greater than the amount he proposes to pay. Here, the Annesis’ proposed calculation method results in a RCP that far exceeds their offer amount. Therefore, the alleged error is immaterial and the Commissioner did not abuse his discretion.” Order, at p. 4. (Footnotes omitted, but note the cases cited.)

I give the Anchorage AK representatives a Taishoff “Good try, second class.”

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