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tax administration when collection of the full liability will
create economic hardship and the compromise would not undermine
compliance with the tax laws by taxpayers in general. See sec.
301.7122-1(b)(3)(i), (iii), Proced. & Admin. Regs. If a taxpayer
does not qualify for effective tax administration compromise on
grounds of economic hardship, the regulations also allow the
Commissioner to compromise a tax liability to promote effective
tax administration when the taxpayer identifies compelling
considerations of public policy or equity. See sec. 301.7122-
1(b)(3)(ii), Proced. & Admin. Regs.
Cochran considered all of the evidence submitted to her by
petitioners and applied the guidelines for evaluating an
offer-in-compromise to promote effective tax administration.
Although petitioners did not specifically state on which basis
they were submitting their effective tax administration offer-in-
compromise, Cochran considered it under both economic hardship
and public policy and equity grounds. Cochran determined that
petitioners’ offer was unacceptable because they had not
demonstrated that they would suffer economic hardship and public
policy and equity reasons did not weigh in favor of accepting
their offer. Cochran’s determination to reject petitioners’
offer-in-compromise was not arbitrary, capricious, or without a
sound basis in fact or law, and it was not abusive or unfair to
petitioners. Cochran’s determination was based on a reasonable
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