- 12 -
appeal in Fargo v. Commissioner, supra, as counsel for the amici.
On brief, petitioner suggests that the Court of Appeals knowingly
wrote its opinion in Fargo in such a way as to distinguish that
case from the cases of counsel’s similarly situated clients
(e.g., petitioner), and to otherwise allow those clients’
liabilities for penalties and interest to be forgiven. We do
not read the opinion of the Court of Appeals in Fargo to support
that conclusion. See Barnes v. Commissioner, supra.
Respondent’s rejection of petitioner’s longstanding case
argument was not arbitrary or capricious.
2. The Internal Revenue Manual Example
Petitioner argues that respondent erred when he determined
that petitioner was not entitled to relief based on Example 2 in
Internal Revenue Manual section 5.8.11.2.2. Petitioner asserts
that many of the facts in this case were not present in the
example and, therefore, any reliance on the example was
misplaced. Petitioner’s argument is not persuasive.
Internal Revenue Manual section 5.8.11.2.2 discusses
effective tax administration offers-in-compromise based on equity
and public policy grounds and provides the Example 2:
In 1983, the taxpayer invested in a nationally marketed
partnership which promised the taxpayer tax benefits
far exceeding the amount of the investment.
Immediately upon investing, the taxpayer claimed
investment tax credits that significantly reduced or
eliminated the tax liabilities for the years 1981
through 1983. In 1984, the IRS opened an audit of the
partnership under the provisions of the Tax Equity and
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011