Estate of Edward P. Roski, Sr., Deceased, Edward P. Roski, Jr., Executor - Page 23
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IV. Respondent’s Denial of the Section 6166 Election on the
Basis of Bright-Line Bond Requirement Is an Abuse of
A. Standard of Review
When reviewing an agency action, a reviewing court shall
hold unlawful and set aside any agency action that is arbitrary,
capricious, or an abuse of discretion. See Keene v.
Commissioner, 121 T.C. 8, 17-18 (2003) (“when a taxpayer’s
underlying tax liability is not properly at issue in the
administrative hearing, we review the Appeals Office’s
determination for abuse of discretion”) (citing Lunsford v.
Commissioner, 117 T.C. 183, 185 (2001)). Respondent argues that
we do not have abuse of discretion review under section 6166
because section 7479 also gives us jurisdiction over eligibility
for the section 6166 election in the case of a “failure by the
Secretary to make a determination”. Sec. 7479(a). Thus,
respondent argues that Congress did not intend an abuse of
discretion standard. Contrary to respondent’s assertion, abuse
of discretion has been found in situations where the
Commissioner’s refusal to exercise discretion is arbitrary,
capricious, or unreasonable. See Greene v. Commissioner, T.C.
Memo. 1997-296 (citing Mailman v. Commissioner, 91 T.C. 1079
(1988), Estate of Gardner v. Commissioner, supra, and Haught v.
Commissioner, T.C. Memo. 1993-58).
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Last modified: November 10, 2007