Roger and Lora Carter - Page 30

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          kept this Court from finding investors in the Hoyt tax shelters             
          to be liable for penalties and interest, nor have they prevented            
          the Courts of Appeals for the Sixth, Ninth, and Tenth Circuits              
          from affirming our decisions to that effect.  See Hansen v.                 
          Commissioner, 471 F.3d 1021 (9th Cir. 2006), affg. T.C. Memo.               
          2004-269; Mortensen v. Commissioner, 440 F.3d 375 (6th Cir.                 
          2006), affg. T.C. Memo. 2004-279; Van Scoten v. Commissioner, 439           
          F.3d 1243 (10th Cir. 2006), affg. T.C. Memo. 2004-275.                      
               Ms. Cochran testified that she considered all of Ms.                   
          Merriam’s and petitioners’ assertions, including the numerous               
          letters and exhibits.  Nevertheless, Ms. Cochran determined that            
          petitioners did not qualify for an offer-in-compromise.                     
               The mere fact that petitioners’ “equitable facts” did not              
          persuade respondent to accept their offer-in-compromise does not            
          mean that those assertions were not considered.  The notice of              
          determination and Ms. Cochran’s testimony demonstrate                       
          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                    
          discretion.                                                                 
               We also find that compromising petitioners’ case on grounds            
          of public policy or equity would not enhance voluntary compliance           






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