Estate of Carol Andrews, Deceased, Robert Andrews, Special Administrator, and Robert Andrews - Page 28

                                       - 28 -                                         
          respondent’s clear understanding and careful consideration of the           
          facts and circumstances of petitioners’ case.  We find that                 
          respondent’s determination that the “equitable facts” did not               
          justify acceptance of petitioners’ offer-in-compromise was not              
          arbitrary or capricious, and thus it was not an abuse of                    
               We also find that compromising petitioners’ 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.                                                     
          C.   Petitioners’ Other Arguments                                           
               1.   Compromise of Penalties and Interest in an Effective              
                    Tax Administration Offer-in-Compromise                            
               Petitioners advance a number of arguments focusing on their            
          assertion that respondent determined that penalties and interest            
          could not be compromised in an effective tax administration                 

Page:  Previous  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  Next

Last modified: May 25, 2011