- 19 -
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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