A taxpayer who disputes a past-due tax bill can request a Collection Due Process (CDP) hearing. At a CDP hearing, one taxpayer didn’t dispute his tax bill of $107,410 but he did submit an offer-in-compromise, proposing to make monthly installment payments of $25. He also proposed being granted currently-not-collectible status and asked for penalty abatement. After analyzing the taxpayer’s ability to pay, the IRS Service Officer determined that he could pay $1,252 per month (the difference between his monthly expenses and income). On that basis, the officer rejected the taxpayer’s $25-per-month offer. The U.S. Tax Court upheld the IRS’s proposed levy collection action. (TC Memo 2024-17)
