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Commissioner has used his adjudicative capacity to adopt a policy
that trumps the discretionary authority granted by section 6165
to require a bond. Although requiring a bond in this case may be
reasonable, respondent did not look at the facts of the case. If
respondent had exercised his discretion, the result might have
been reasonable; however, the means to the end was still
arbitrary.9
Respondent’s failure to exercise discretion is grounds to
set aside his determination. See Asimakopoulos v. INS, 445 F.2d
1362 (9th Cir. 1971) (citing United States ex rel. Accardi v.
Shaughnessy, 347 U.S. 260, 266-268 (1954)). An agency’s reliance
on a standard that prevents the exercise of discretion warrants
further proceedings. See id. at 1365. Respondent argues that
factors such as the estate's creditworthiness are not the only
factors he is able to consider in making his decision. He
contends that the difficulties in administering the deferrals
that were discussed in the TIGTA report were valid factors for
him to consider in the estate’s case. Respondent further argues
that there is always risk of default in a debtor-creditor
relationship and that IRS collection experience showed a high
9We do not address in this Opinion whether the Commissioner
could have exercised his discretion through the promulgation of a
regulation. See, e.g., Fook Hong Mak v. INS, 435 F.2d 728, 730
(2d Cir. 1970). Here, he established his bright-line test
through insertion in the Internal Revenue Manual without any
opportunity for notice and comment.
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