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their underlying tax liability. The only collection alternative
offered by petitioners at their hearing was their offer in
compromise for $100. No other issues were raised.
We review the Appeals officer’s determination for an abuse
of discretion. Goza v. Commissioner, 114 T.C. 176, 182 (2000).
We must decide whether respondent exercised his discretion
arbitrarily, capriciously, or without sound basis in fact or law.
Woodral v. Commissioner, 112 T.C. 19, 23 (1999); Fargo v.
Commissioner, T.C. Memo. 2004-13. The issue raised with the
Appeals officer is the proper point of reference in determining
whether the Appeals officer abused his discretion. Magana v.
Commissioner, 118 T.C. 488, 493-494 (2002).
Petitioners contend that the Appeals officer abused his
discretion in rejecting their offer to compromise the $7,832.90
total liability for $100. Specifically, petitioners argue that
their offer in compromise should have been accepted because they
will not be able to meet basic living expenses if their assets
are lost to foreclosure and respondent’s lien is left in place.
They point to their poor health, age, and education as evidence
that they will experience economic hardship if the value of their
equity is not available to them. They also argue that the
examples contained in section 301.7122-1(c)(3)(iii), Proced. &
Admin. Regs., compel respondent to accept their ETA offer.
We note at the outset that based on the record petitioners
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