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after we decided Kelley v. Commissioner, supra. Quoting
extensively from legislative history, petitioners argue that the
delay between the adjudication of the underlying tax issues in
1993 and the first contact they received from the IRS in 1999
falls within the class of situations contemplated by Congress
when it described the offer in compromise program as a method for
resolving “longstanding cases * * * which have accumulated as a
result of delay in determining the taxpayer’s liability.” H.
Conf. Rept. 105-599, at 289 (1998), 1998-3 C.B. 747, 1043.
Petitioners suggest that the IRS was at the very least
complicit, and perhaps negligent or malicious, in allowing their
original tax savings of $23,977 to balloon into a total liability
of more than $127,000. They allege that this IRS conduct should
have compelled respondent to accept their offer in compromise.
Respondent, while acknowledging the length of time that
passed between our decision in Kelley v. Commissioner, T.C. Memo.
1993-495, and his contacting petitioners, contends that it was
due not to any improprieties by the IRS, but rather to the
deliberate pace at which TEFRA partnership audits may progress.
The partnership interests which petitioners held were not in the
partnerships directly at issue in Kelley, but rather in
partnerships which themselves were partners in the partnerships
that Kelley analyzed. This tiered structure meant that under
TEFRA, even after Kelley, respondent had to negotiate a closing
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