Estate of Carol Andrews, Deceased, Robert Andrews, Special Administrator, and Robert Andrews - Page 26

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          (3) Hoyt’s criminal conviction; (4) Hoyt’s fraud on petitioners;            
          and (5) other letters and cases.  The basic thrust of                       
          petitioners’ argument is that they were defrauded by Hoyt and               
          that, if they were held responsible for penalties and interest              
          incurred as a result of their investment in a tax shelter, it               
          would be inequitable and against public policy.  Petitioners’               
          argument is not persuasive.                                                 
               While the regulations do not set forth a specific standard             
          for evaluating an offer-in-compromise based on claims of public             
          policy or equity, the regulations contain two examples.  See sec.           
          301.7122-1(c)(3)(iv), Examples (1) and (2), Proced. & Admin.                
          Regs.  The first example describes a taxpayer who is seriously              
          ill and unable to file income tax returns for several years.  The           
          second example describes a taxpayer who received erroneous advice           
          from the Commissioner as to the tax effect of the taxpayer’s                
          actions.  Neither example bears any resemblance to this case.               
          Unlike the exceptional circumstances exemplified in the                     
          regulations, petitioners’ situation is neither unique nor                   
          exceptional in that their situation mirrors those of numerous               
          other taxpayers who claimed tax shelter deductions in the 1980s             

          Appeals for the Sixth, Ninth, and Tenth Circuits.  See, e.g.,               
          Hansen v. Commissioner, 471 F.3d 1021 (9th Cir. 2006), affg. T.C.           
          Memo. 2004-269; Mortensen v. Commissioner, 440 F.3d 375, 390-391            
          (6th Cir. 2006), affg. T.C. Memo. 2004-279; Van Scoten v.                   
          Commissioner, 439 F.3d 1243, 1254-1256 (10th Cir. 2006), affg.              
          T.C. Memo. 2004-275.                                                        

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