Barry and Sherry Blondheim - Page 19

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          454 F.3d at 786.  Unlike the exceptional circumstances                      
          exemplified in the regulations, petitioners’ situation is neither           
          unique nor exceptional in that petitioners’ situation mirrors               
          that of numerous taxpayers who claimed tax shelter deductions in            
          the 1980s and 1990s, obtained the tax advantages, promptly forgot           
          about their “investment”, and now realize that paying their taxes           
          may require a change of lifestyle.10  See Clayton v.                        
          Commissioner, supra; Barnes v. Commissioner, supra.                         
               We also believe that compromising petitioners’ case on                 
          grounds of public policy or equity would not promote effective              
          tax administration.  While petitioners portray themselves as                
          victims of Hoyt’s alleged fraud and respondent’s alleged delay in           
          dealing with Hoyt, they take no responsibility for their tax                
          predicament.  We cannot agree that acceptance by respondent of              
          petitioners’ $83,213 offer to satisfy their $298,003 tax                    
          liability would enhance voluntary compliance by other taxpayers.            


               10 Of course, the examples in the regulations are not meant            
          to be exhaustive, and petitioners’ situation is not identical to            
          that of the taxpayers in Fargo v. Commissioner, 447 F.3d at 714,            
          regarding whom the Court of Appeals for the Ninth Circuit noted             
          that “no evidence was presented to suggest that Taxpayers were              
          the subject of fraud or deception”.  Such considerations,                   
          however, have not kept this Court from finding investors in                 
          Hoyt’s shelters to be culpable of negligence, most recently in              
          Keller v. Commissioner, T.C. Memo. 2006-131, nor prevented the              
          Courts of Appeals for the Sixth and Tenth Circuits from affirming           
          our decisions to that effect in Mortensen v. Commissioner, 440              
          F.3d 375 (6th Cir. 2006), affg. T.C. Memo. 2004-279, and Van                
          Scoten v. Commissioner, 439 F.3d 1243 (10th Cir. 2006), affg.               
          T.C. Memo. 2004-275.                                                        




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