Barry and Sherry Blondheim - Page 20

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          A compromise on that basis would place the Government in the                
          unenviable role of an insurer against poor business decisions by            
          taxpayers, reducing the incentive for taxpayers to investigate              
          thoroughly the consequences of transactions into which they                 
          enter.  It would be particularly inappropriate for the Government           
          to play that role here, where the transaction at issue involves a           
          tax shelter.  Reducing the risks of participating in tax shelters           
          would encourage more taxpayers to run those risks, thus                     
          undermining rather than enhancing compliance with the tax laws.11           
          See Clayton v. Commissioner, supra; Barnes v. Commissioner,                 
          supra.                                                                      
               Sixth, petitioners argue that Cochran failed to balance                
          efficient collection with the legitimate concern that collection            
          be no more intrusive than necessary.  We disagree.  Cochran                 
          thoroughly considered this balancing issue on the basis of the              
          information and proposed collection alternative given to her by             
          petitioners.  She concluded that “the proposed levy action                  

               11 Nor does the fact that petitioners’ case may be                     
          “longstanding” overcome the detrimental impact on voluntary                 
          compliance that could result from respondent’s accepting                    
          petitioners’ offer-in-compromise.  An example in IRM sec.                   
          5.8.11.2.2 implicitly addresses the “longstanding” issue.  There,           
          the taxpayer invested in a tax shelter in 1983, thereby incurring           
          tax liabilities for 1981 through 1983.  He failed to accept a               
          settlement offer by respondent that would have eliminated a                 
          substantial portion of his interest and penalties.  Although the            
          example, which is similar to petitioners’ case in several                   
          respects, would qualify as a “longstanding” case by petitioners’            
          standards, the offer was not acceptable because acceptance of it            
          would undermine compliance with the tax laws.                               




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