There’s a common misperception that the IRM requires liquidation of assets to pay the liability before a CA will be considered. That’s not the case; see Timothy L. Fisher and Roseann Fisher, T. C. Memo. 2025-124, filed 11/25/25.

Judge Kashi (“My or the High”) Way Judge-‘splains.

“… AO V requested that petitioners explore borrowing against the available equity in their primary residence. The Court has generally held that there is no abuse of discretion when an AO relies on guidelines published in the IRM to evaluate a proposed installment agreement. The Court has also routinely held that an AO does not abuse his discretion when he rejects an installment agreement because a taxpayer refuses to liquidate assets to satisfy his tax liabilities.” T. C. Memo. 2025-124, at pp. 6-7. (Name and citations omitted).

AO V didn’t even require liquidation here. ” AO V did not require petitioners to liquidate any assets. She merely required that petitioners explore the possibility of liquidating or borrowing against their assets. Both this Court and the IRM require that taxpayers attempt to tap into the equity of their assets, including equity in a personal residence, to satisfy their tax obligations.” T. C. Memo. 2025-124, at p. 7. (Emphasis by the Court; name and citations omitted).

Taishoff says a mortgage broker’s letter and an FHA loan application would have done the trick, but Tim & Roseann did nothing, and petitioned the NOD.

Of course, there’s a hardship exception, but Tim & Roseann could hardly plead that, with a six-figure checking account and north of $1.5 million in home equity. T. C. Memo. 2025-124, at p. 8.  True, the RO who reviewed the proposed IA erroneously found more home equity, but both sides treated that as harmless error.