Gary W. McDonough - Page 20

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                   5.   Encouraging Voluntary Compliance With the Tax Laws            
              Any decision by Ms. Cochran to accept petitioner’s offer-in-            
         compromise because of ETA based on economic hardship must be                 
         viewed against the backdrop of section 301.7122-1(b)(3)(iii),                
         Proced. & Admin. Regs.14  See Barnes v. Commissioner, T.C. Memo.             
         2006-150.  This section requires Ms. Cochran to deny petitioner’s            
         offer if its acceptance would undermine voluntary compliance with            
         tax laws by taxpayers in general.  Thus, even if this Court were             
         to assume arguendo that petitioner would suffer economic                     
         hardship, a finding that it declines to make, this Court would               
         not find that Ms. Cochran’s rejection of petitioner’s offer was              
         an abuse of discretion.  As discussed below (in our discussion of            
         petitioner’s “equitable facts” argument), acceptance of                      
         petitioner’s offer would undermine voluntary compliance with tax             
         laws by taxpayers in general.                                                
              B.   Public Policy and Equity Considerations                            
              Petitioner asserts that “There are so many unique and                   
         equitable facts in this case that this case is an exceptional                
         circumstance” and respondent abused his discretion by not                    
         accepting those facts as grounds for an offer-in-compromise.  In             
         support of his assertion, petitioner argues that:  (1) The                   
         longstanding nature of this case justifies acceptance of the                 

               14  The prospect that acceptance of an offer will undermine            
          compliance with the tax laws militates against its acceptance.              
          See also Barnes v. Commissioner, T.C. Memo. 2006-150.                       




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