Estate of Carol Andrews, Deceased, Robert Andrews, Special Administrator, and Robert Andrews - Page 29

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          offer-in-compromise.  Petitioners argue that such a determination           
          is contrary to legislative history and is therefore an abuse of             
          discretion.  These arguments are not persuasive.                            
               The regulations under section 7122 provide that “If the                
          Secretary determines that there are grounds for compromise under            
          this section, the Secretary may, at the Secretary’s discretion,             
          compromise any civil * * * liability arising under the internal             
          revenue laws”.  Sec. 301.7122-1(a)(1), Proced. & Admin. Regs.  In           
          other words, the Secretary may compromise a taxpayer’s tax                  
          liability if he determines that grounds for a compromise exist.             
          If the Secretary determines that grounds do not exist, the amount           
          offered (or the way in which the offer is calculated) need not be           
               Petitioners’ arguments regarding the compromise of penalties           
          and interest do not relate to whether there are grounds for a               
          compromise.  Instead, these arguments go to whether the amount              
          petitioners offered to compromise their tax liability was                   
          acceptable.  As addressed above, respondent’s determination that            
          the facts and circumstances of petitioners’ case did not warrant            
          acceptance of their offer-in-compromise was not arbitrary or                
          capricious and was thus not an abuse of discretion.  Because no             
          grounds for compromise exist, we need not address whether                   
          respondent can or should compromise penalties and interest in an            

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