Estate of Carol Andrews, Deceased, Robert Andrews, Special Administrator, and Robert Andrews - Page 25

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          issued to the partnerships; after several years of litigation,              
          Tax Court decisions upheld the vast majority of the deficiencies            
          asserted in the FPAAs; and petitioners argue that interest has              
          accumulated as the result of delays by and other actions of the             
          tax matters partner.                                                        
               Petitioners are also correct in asserting that not all the             
          facts in their case are present in the example.  However, it is             
          unreasonable to expect that facts in an example be identical to             
          facts of a particular case before the example can be relied upon.           
          The IRM example was only one of many factors respondent                     
          considered.  Given the similarities to petitioners’ case,                   
          respondent’s reliance on that example was not arbitrary or                  
               3.   Petitioners’ Other “Equitable Facts”                              
               Petitioners argue that respondent abused his discretion by             
          failing to consider the other “equitable facts” of this case.               
          Petitioners’ “equitable facts” include reference to:  (1)                   
          Petitioners’ reliance on Bales v. Commissioner, T.C. Memo. 1989-            
          568;13 (2) petitioners’ reliance on Hoyt’s enrolled agent status;           

               13  Bales v. Commissioner, T.C. Memo. 1989-568, involved               
          deficiencies determined against various investors in several Hoyt           
          partnerships.  This Court found in favor of the investors on                
          several issues, stating that “the transaction in issue should be            
          respected for Federal income tax purposes.”  Taxpayers in many              
          Hoyt-related cases have used Bales as the basis for a reasonable            
          cause defense to accuracy-related penalties.  This argument has             
          been uniformly rejected by this Court and by the Courts of                  

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