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taxpayers with the tax laws.10 Sec. 301.7122-1(b)(3), Proced. &
Admin. Regs.
Petitioner proposed an offer-in-compromise based on
effective tax administration, arguing that exceptional
circumstances existed such that collection of the full liability
would undermine public confidence that the tax laws are being
administered in a fair and equitable manner. Respondent
determined that petitioner’s offer-in-compromise did not meet the
criteria for an effective tax administration offer-in-compromise.
Because the underlying tax liability is not at issue, our
review under section 6330 is for abuse of discretion. See Sego
v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner,
114 T.C. 176, 182 (2000). This standard does not ask us to
decide whether in our own opinion petitioner’s offer-in-
compromise should have been accepted, but whether respondent’s
rejection of the offer-in-compromise was arbitrary, capricious,
or without sound basis in fact or law. Woodral v. Commissioner,
112 T.C. 19, 23 (1999); Keller v. Commissioner, T.C. Memo. 2006-
166; Fowler v. Commissioner, T.C. Memo. 2004-163.
10 The regulations also provide that the Secretary may
compromise a liability on the ground of effective tax
administration when collection of the full liability will create
economic hardship. See sec. 301.7122-1(b), Proced. & Admin.
Regs. While petitioner disputes Ms. Cochran’s determination of
his reasonable collection potential, he does not argue that
collection of the full liability would create economic hardship.
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Last modified: May 25, 2011