7122(a) AUTHORIZATION. --The Secretary may compromise any civil or criminal case
arising under the internal revenue laws prior to
reference to the Department of Justice for
prosecution or defense; and the Attorney General or
his delegate may compromise any such case after
reference to the Department of Justice for
prosecution or defense.
7122(b) RECORD. --Whenever a compromise is made by the Secretary in any case, there shall
be placed on file in the office of the Secretary the
opinion of the General Counsel for the Department of
the Treasury or his delegate, with his reasons
therefor, with a statement of --
7122(b)(1) The
amount of tax assessed,
7122(b)(2) The
amount of interest, additional amount, addition to
the tax, or assessable penalty, imposed by law on
the person against whom the tax is assessed, and
7122(b)(3) The
amount actually paid in accordance with the terms of
the compromise.
Notwithstanding
the foregoing provisions of this subsection, no such
opinion shall be required with respect to the
compromise of any civil case in which the unpaid
amount of tax assessed (including any interest,
additional amount, addition to the tax, or
assessable penalty) is less than $50,000. However,
such compromise shall be subject to continuing
quality review by the Secretary.
7122(c) STANDARDS FOR EVALUATION OF OFFERS. --
7122(c)(1) IN GENERAL. --The Secretary shall prescribe guidelines for officers and
employees of the Internal Revenue Service to
determine whether an offer-in-compromise is adequate
and should be accepted to resolve a dispute.
7122(c)(2) ALLOWANCES FOR BASIC LIVING EXPENSES. --
7122(c)(2)(A)
IN GENERAL. --In
prescribing guidelines under paragraph (1), the
Secretary shall develop and publish schedules of
national and local allowances designed to provide
that taxpayers entering into a compromise have an
adequate means to provide for basic living expenses.
7122(c)(2)(B)
USE OF SCHEDULES. --The
guidelines shall provide that officers and employees
of the Internal Revenue Service shall determine, on
the basis of the facts and circumstances of each
taxpayer, whether the use of the schedules published
under subparagraph (A) is appropriate and shall not
use the schedules to the extent such use would
result in the taxpayer not having adequate means to
provide for basic living expenses.
7122(c)(3) SPECIAL RULES RELATING TO TREATMENT OF OFFERS. --The
guidelines under paragraph (1) shall provide that --
7122(c)(3)(A)
an
officer or employee of the Internal Revenue Service
shall not reject an offer-in-compromise from a
low-income taxpayer solely on the basis of the
amount of the offer; and
7122(c)(3)(B)
in
the case of an offer-in-compromise which relates
only to issues of liability of the taxpayer --
7122(c)(3)(B)(i) such offer shall not be rejected solely because the Secretary is unable
to locate the taxpayer's return or return
information for verification of such liability; and
7122(c)(3)(B)(ii) the taxpayer shall not be required to provide a financial statement.
7122(d) ADMINISTRATIVE REVIEW. --The Secretary shall establish procedures --
7122(d)(1) for
an independent administrative review of any
rejection of a proposed offer-in-compromise or
installment agreement made by a taxpayer under this
section or section
6159 before such rejection is communicated to
the taxpayer; and
7122(d)(2) which allow a taxpayer
to appeal any rejection of such offer or agreement
to the Internal Revenue Service Office of Appeals.