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determination made under section 6330(c)(3) is1) “shall * * *
hold unlawful and set aside agency action * * * found to be * * *
without observance of procedure required by law”. We thus have
our authority for refusing to sustain a determination made under
section 6330 when the Appeals Officer has refused to allow the
taxpayer to record an in-person interview.
APA sec. 706 concludes, however: “In making the foregoing
determinations, the court shall review the whole record or those
parts of it cited by a party, and due account shall be taken of
the rule of prejudicial error.” (Emphasis added.) The “rule of
prejudicial error” (otherwise the doctrine of harmless error), as
applied to an administrative action, provides that the reviewing
court shall disregard procedural errors unless the complaining
party was prejudiced thereby. See the discussion of APA sec. 706
and harmless error in Nestor v. Commissioner, 118 T.C. 162, 173
(2002) (Halpern, J., concurring). In this proceeding, petitioner
did not proceed with his section 6330 hearing after the Appeals
Officer refused him permission to record it, and respondent’s
sole ground for summary judgment is the absolute inapplicability
of section 7521(a)(1) to a section 6330 hearing. Respondent
asked that, if we reject his argument (which we do), we remand
the case so that petitioner could be accorded a hearing that he
1 See Lunsford v. Commissioner, 117 T.C. 159, 170-171
(2001) (Halpern, J., concurring).
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