Wednesday, January 1, 2014

section 7122 offer in compromise Form 656

Section 7122 and the regulations thereunder provide the exclusive method of effectuating a valid compromise of assessed tax liabilities which will be binding on both the taxpayer and the Government.” Rohn v. Commissioner, T.C. Memo. 1994-244, 1994; Broz v. Commissioner, 137 T.C.46, 56 (2011), aff’d, 727 F.3d 621 (6th Cir. 2013).

Section 301.7122-1(d)(1), Proced. & Admin. Regs., provides that an “offer
to compromise a tax liability pursuant to section 7122 must be submitted
according to the procedures, and in the form and manner, prescribed by the
Secretary. An offer to compromise a tax liability must be made in writing, must be
signed by the taxpayer under penalty of perjury, and must contain all of the
information prescribed or requested by the Secretary.” Rev. Proc. 2003-71, sec.
4.01, 2003-2 C.B. 517, 517, provides that an “offer to compromise a tax liability
must be submitted in writing on the Service’s Form 656, Offer in Compromise.”
See also Godwin v. Commissioner, T.C. Memo. 2003-289, 2003.

Section 301.7122-1(e)(1), Proced. & Admin. Regs., specifically provides
that “[a]n offer to compromise has not been accepted until the IRS issues a written
notification of acceptance to the taxpayer or the taxpayer’s representative.” See
also Rev. Proc. 2003-71, sec. 8.01, 2003-2 C.B. at 519. (212) 588-1113

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