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$480,034.10 Respondent determined that petitioner’s reasonable
collection potential was $456,881 and that his offer-in-
compromise did not meet the criteria for an offer-in-compromise
based on either doubt as to collectibility with special
circumstances or effective tax administration.
Because the underlying tax liability is not at issue, our
review under section 6330 is for abuse of discretion. See Sego
v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner,
114 T.C. 176, 182 (2000). This standard does not ask us to
decide whether in our own opinion petitioner’s offer-in-
compromise should have been accepted, but whether respondent’s
rejection of the offer-in-compromise was arbitrary, capricious,
or without sound basis in fact or law. Woodral v. Commissioner,
112 T.C. 19, 23 (1999); Keller v. Commissioner, T.C. Memo. 2006-
166; Fowler v. Commissioner, T.C. Memo. 2004-163.
A. Effective Tax Administration
If the taxpayer has the ability to pay his tax liability in
full, the Secretary may compromise the tax liability on the
ground of effective tax administration when: (1) Collection of
the full liability will create economic hardship; or (2)
exceptional circumstances exist such that collection of the full
10 Petitioner estimated that his total outstanding tax
liabilities for 1981-86, 1988, and 1992 were $480,034. This
amount does not include his outstanding tax liabilities for 1987,
1989-91, and 1993-96. Thus, it appears that petitioner is
actually seeking to compromise an amount greater than $480,034.
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