This question involves how the IRS evaluates collection potential when it receives an offer in compromise based upon doubt as to collectability. Consider this statement: When evaluating the collection potential of a taxpayer, the IRS uses the quick sale value of the taxpayer's assets. Question: which of the following most accurately describes the above statement?

The statement is true. The statement is false.

The statement is false because as a rational creditor, the IRS instructs its Revenue Officers to use a value that will maximize collection potential.

There are not enough facts to determine if the sentence is true or false. T

he statement is false because the IRS generally uses a blended fair market and cost valuation methodology.