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supplemental notice of determination reflects consideration of
the arguments raised in the letter.
The mere fact that petitioner’s “equitable facts” did not
persuade respondent to accept petitioner’s offer-in-compromise
does not mean that those assertions were not considered. The
supplemental notice of determination and Mr. Vander Linden’s
testimony demonstrate respondent’s clear understanding and
careful consideration of the facts and circumstances of
petitioner’s case. We find that respondent’s determination that
the “equitable facts” did not justify acceptance of petitioner’s
offer-in-compromise was not arbitrary or capricious, and thus was
not an abuse of discretion.
B. Compromise of Penalties and Interest in an Effective Tax
Administration Offer-in-Compromise
Petitioner advances a number of arguments focusing on his
assertion that respondent determined that penalties and interest
could not be compromised in an effective tax administration
offer-in-compromise. Petitioner argues that such a determination
is contrary to legislative history and is therefore an abuse of
discretion. These arguments are not persuasive.
The regulations under section 7122 provide that “If the
Secretary determines that there are grounds for compromise under
this section, the Secretary may, at the Secretary’s discretion,
compromise any civil * * * liability arising under the internal
revenue laws”. Sec. 301.7122-1(a)(1), Proced. & Admin. Regs. In
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