- 14 -
testified that he continued, until some 3 months before trial, to
make payments of about $700 per month on a recreational boat.
We conclude that petitioners are liable for the section
6651(a)(2) additions to tax for failure to pay the amounts shown
on their Federal income tax returns for 1999 and 2000.
Installment Agreement
On brief, petitioners argue that the Appeals officer abused
her discretion in rejecting their installment agreement
proposals. They requested an installment agreement whereby they
would pay $1,200 per month in full discharge of their tax
liabilities.8 We review this matter for abuse of discretion.
See Orum v. Commissioner, 123 T.C. 1, 12-13 (2004), affd. 412
F.3d 819 (7th Cir. 2005). An abuse of discretion occurs when
respondent takes action that is arbitrary or capricious, lacks
sound basis in law, or is not justifiable in light of the facts
and circumstances. Mailman v. Commissioner, 91 T.C. 1079, 1084
(1988).
Pursuant to section 6159(a), as in effect during the period
covering the administrative proceedings in this case, the
8 In their request for an administrative hearing,
petitioners requested an offer in compromise based on doubt as to
collectability, and, in the alternative, an installment
agreement. In the administrative hearing, however, petitioners
pursued only an installment agreement. Consequently, the Appeals
officer did not consider petitioners’ eligibility for an offer in
compromise. In this Court proceeding, petitioners have not
argued that they should be entitled to an offer in compromise.
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