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supra at 23. The Court reviews the Appeals officer’s rejection
of an offer-in-compromise to decide whether the rejection was
arbitrary, capricious, or without sound basis in fact or law.
Murphy v. Commissioner, supra at 320; Woodral v. Commissioner,
supra at 23.
Section 7122(a) authorizes the Secretary to compromise any
civil case arising under the internal revenue laws. In general,
the decision to accept or reject an offer, as well as the terms
and conditions agreed to, are left to the discretion of the
Secretary. Sec. 301.7122-1(c)(1), Proced. & Admin. Regs.
However, regulations promulgated under section 7122 provide that
“No offer to compromise may be rejected solely on the basis of
the amount of the offer without evaluating that offer under the
provisions” of the regulations “and the Secretary’s policies and
procedures regarding the compromise of cases.” Sec. 301.7122-
1(f)(3), Proced. & Admin. Regs.
The grounds for compromise of a tax liability are doubt as
to liability, doubt as to collectibility, and promotion of
effective tax administration. Sec. 301.7122-1(b), Proced. &
Admin. Regs. Petitioner based his offer-in-compromise on doubt
as to collectibility, which “exists in any case where the
taxpayer’s assets and income are less than the full amount of the
liability.” Sec. 301.7122-1(b)(2), Proced. & Admin. Regs. In
determining the taxpayer’s ability to pay, the individual facts
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