Estate of Carol Andrews, Deceased, Robert Andrews, Special Administrator, and Robert Andrews - Page 14

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          $255,254.  Petitioners argued that collection of the full                   
          liability would create economic hardship and would undermine                
          public confidence that the tax laws are being administered in a             
          fair and equitable manner.  Respondent determined that                      
          petitioners’ reasonable collection potential was $380,076 and               
          that their offer-in-compromise did not meet the criteria for an             
          offer-in-compromise based on either doubt as to collectibility              
          with special circumstances or effective tax administration.                 
               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 petitioners’ 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.  Because the              
          same factors are taken into account in evaluating offers-in-                
          compromise based on doubt as to collectibility with special                 
          circumstances and on effective tax administration (economic                 
          hardship or considerations of public policy or equity), we                  
          consider petitioners’ separate grounds for their offer-in-                  
          compromise together.  See Murphy v. Commissioner, 125 T.C. 301,             

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