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IV. Whether Respondent Abused His Discretion
Where, as here, the validity of the underlying tax liability
is not at issue, we review the determination for abuse of
discretion. Sego v. Commissioner, 114 T.C. at 610; Goza v.
Commissioner, 114 T.C. at 181-182. In doing so, we review
whether the Appeals officer’s determination was arbitrary,
capricious, or without sound basis in fact or law. Woodral v.
Commissioner, 112 T.C. at 23. Having observed the appearance and
demeanor of the witnesses testifying for petitioner at trial,
including petitioner, we find them to be honest, forthright, and
credible.
Taking into account all the facts and circumstances, we
conclude that on the basis of the record before us, respondent
abused his discretion in determining to proceed with collection.
A. Whether Petitioner’s Return Was Timely Filed
We note at the outset that contrary to petitioner’s
contentions, we find that petitioner’s return was not timely
filed. Filing, generally, “is not complete until the document is
delivered and received”. United States v. Lombardo, 241 U.S. 73,
76 (1916). Section 7502 provides an exception to this rule.
Section 7502(a)(1) provides that, in certain circumstances, a
timely mailed document will be treated as though it were timely
filed. Section 7502(a)(2) provides that the timely
mailing/timely filing rule applies if the postmark date on an
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