Statutory. Compromise authority is
vested in the Internal Revenue
Service by I.R.C. §7122 which
provides as follows:
"(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.
"(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-- "(1) The amount of tax
assessed, "(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 "(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 $50,000.00. However,
such compromise shall be
subject to continuing
quality review by the
Secretary.
Compromise Processed by Internal
Revenue Service.
I.R.C. §7122(a) is the authorization
for the Commissioner and delegates,
as delegates of the Secretary of the
Treasury, to compromise a civil or
criminal tax case arising under the
internal revenue laws prior to
reference to the Department of
Justice for prosecution or defense.
Internal Revenue Form 656 is the
required form for an offer.
Administrative. Offers in compromise
are made either to Service personnel
or to Appeals. Accordingly, the
Secretary has delegated the
compromise authority to the
Commissioner, who has redelegated
it. See Delegation Order No. 11 (as
revised). Handbook of Delegation
Orders, I.R.M. 1229.
Presented by Alvin Brown and Associates,
tax attorney, formerly with the Office of the Chief Counsel of the
IRS.
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