Mark Fowler and Joylyn Souter-Fowler - Page 9

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          seek judicial review with the Tax Court or a District Court.                
          Where the validity of the underlying tax liability is properly at           
          issue, the Court will review the matter on a de novo basis.  Sego           
          v. Commissioner, 114 T.C. 604, 610 (2000).  However, when the               
          validity of the underlying tax is not at issue, the Court will              
          review the Commissioner’s administrative determination for an               
          abuse of discretion.  Id.  Petitioners do not dispute the                   
          validity of the underlying tax.  Accordingly, our review is for             
          an abuse of discretion.                                                     
               We do not conduct an independent review of what would be               
          acceptable offers in compromise.  We review only whether the                
          Appeals officer’s refusal to accept the offers in compromise was            
          arbitrary, capricious, or without sound basis in fact or law.               
          See Woodral v. Commissioner, 112 T.C. 19, 23 (1999).  The Court             
          considers whether the Commissioner abused his discretion in                 
          rejecting a taxpayer’s position with respect to any relevant                
          issues, including challenges to the appropriateness of the                  
          collections action, and offers of collection alternatives.  See             
          sec. 6330(c)(2)(A).  This case involves collection alternatives.            
               Section 7122(a) authorizes the Secretary to compromise any             
          civil case arising under the internal revenue laws.  There are              
          three standards that the Secretary may use to compromise a                  
          liability.  The first standard is doubt as to liability, the                
          second being doubt as to ability to collect, and the third being            

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