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On January 17, 2002, the settlement officer prepared an
Appeals Case Memorandum sustaining the proposed levy action. On
February 19, 2002, respondent issued to petitioners a notice of
determination concluding that petitioners’ offer in compromise
was unacceptable and denying petitioners’ request to suspend
collection action.
OPINION
Because the underlying tax liability is not in dispute, we
review the settlement officer’s actions under an abuse of
discretion standard. Goza v. Commissioner, 114 T.C. 176, 181-182
(2000). An abuse of discretion occurs when respondent takes
action that is arbitrary or capricious, lacks sound basis in law,
or is not justifiable in light of the facts and circumstances.
Mailman v. Commissioner, 91 T.C. 1079, 1084 (1988).
Petitioners contend that the settlement officer abused his
discretion in refusing to designate petitioners’ cumulative
liability as currently not collectible. Petitioners also contend
that the settlement officer abused his discretion in refusing to
accept the proposed payments of $180 per month under either an
installment agreement or an offer in compromise.
Generally, Appeals officers are to consider alternatives to
collection offered by taxpayers in the course of collection due
process proceedings. Sec. 6330(c). As indicated, petitioners
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