Daniel O. Abelein - Page 16

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          arbitrary or capricious, and thus it was not an abuse of                    
          discretion.                                                                 
               We also find that compromising petitioner’s case on grounds            
          of public policy or equity would not enhance voluntary compliance           
          by other taxpayers.  A compromise on that basis would place the             
          Government in the unenviable role of an insurer against poor                
          business decisions by taxpayers, reducing the incentive for                 
          taxpayers to investigate thoroughly the consequences of                     
          transactions into which they enter.  It would be particularly               
          inappropriate for the Government to play that role here, where              
          the transaction at issue is participation in a tax shelter.                 
          Reducing the risks of participating in tax shelters would                   
          encourage more taxpayers to run those risks, thus undermining               
          rather than enhancing compliance with the tax laws.  See Barnes             
          v. Commissioner, supra.                                                     
          B.   Petitioner’s Other Arguments                                           
               1.   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.                            







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