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a de novo basis. However, where the validity of the
underlying tax liability is not properly at issue, the
Court will review the Commissioner’s administrative
determination for abuse of discretion. [Sego v.
Commissioner, 114 T.C. 604, 610 (2000).]
C. Offers in Compromise
Section 7122(a), as pertinent here, authorizes the Secretary
of the Treasury to compromise any civil case arising under the
internal revenue laws. Regulations promulgated under section
7122 set forth three grounds for compromise of a liability: (1)
Doubt as to liability, (2) doubt as to collectibility, or (3)
promotion of effective tax administration. Sec. 301.7122-1(b),
Proced. & Admin. Regs.3 With respect to the third-listed ground,
a compromise may be entered to promote effective tax
administration where: (1)(a) Collection of the full liability
would cause economic hardship; or (b) exceptional circumstances
exist such that collection of the full liability would undermine
3 Sec. 301.7122-1, Proced. & Admin. Regs., contains an
effective date provision stating that the section applies to
offers in compromise pending on or submitted on or after July 18,
2002. Sec. 301.7122-1(k), Proced. & Admin. Regs. Previous
temporary regulations by their terms apply to offers in
compromise submitted on or after July 21, 1999, through July 19,
2002. Sec. 301.7122-1T(j), Temporary Proced. & Admin. Regs., 64
Fed. Reg. 39027 (July 21, 1999). Because the final and temporary
regulations do not differ materially in substance in any way
relevant here, we need not resolve which section would apply in
petitioner’s circumstances. We further note that temporary
regulations are entitled to the same weight and binding effect as
final regulations. Peterson Marital Trust v. Commissioner, 102
T.C. 790, 797 (1994), affd. 78 F.3d 795 (2d Cir. 1996). For
simplicity and convenience, citations will be to the final
regulations.
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