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In the February 28, 2005, letter, petitioners stated:
The taxpayers would like to substantially increase the
Offer amount and abandon their special circumstances
arguments related to retirement, medical conditions,
and the fact that they are victims of a convicted
felon. They would like to offer the full collection
potential * * * of $150,000 contingent on acceptance of
the payment on November 1, 2006. [Emphasis added.]
Contrary to petitioners’ assertion, this letter does not state
that the abandonment of their special circumstances arguments is
contingent upon acceptance of their increased offer amount.
Instead, the letter communicates petitioners’ intention to do two
things, “[1] substantially increase the offer amount and [2]
abandon their special circumstances arguments”. (Emphasis
added.) The only contingency expressed is that they would
increase the offer amount only if the payment would be accepted
on November 1, 2006. In addition, Mr. Owens credibly testified
that he did not recall petitioners’ stating that their
abandonment of the special circumstances argument was contingent
upon acceptance of the increased offer amount. Given the above-
quoted language, it was not arbitrary or capricious for Mr. Owens
to conclude that petitioners had abandoned their doubt as to
collectibility with special circumstances and effective tax
administration arguments.
Even assuming arguendo that Mr. Owens should have made a
final determination with respect to petitioners’ doubt as to
collectibility with special circumstances and effective tax
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