- 22 -
transactions into which they enter. It would be particularly
inappropriate for the Government to play that role here, where
the transaction at issue is participation in 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.12
Fifth, 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 issue on the basis of the information
and proposed collection alternative given to her by petitioners.
She concluded that “the proposed levy action regarding the
taxpayers represents the only efficient means for collection of
the liability at issue in this case”. While petitioners assert
that Cochran did not consider all of the facts and circumstances
of this case, “including whether the circumstances of a
particular case warrant acceptance of an amount that might not
12 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 accepting it
would undermine compliance with the tax laws.
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011