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Because the underlying tax liability is not at issue, our
review under section 6330 is for abuse of discretion. See Sego
v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner,
114 T.C. 176, 182 (2000). This standard does not ask us to
decide whether in our own opinion petitioners’ offer-in-
compromise should have been accepted, but whether respondent’s
rejection of the offer-in-compromise was arbitrary, capricious,
or without sound basis in fact or law. Woodral v. Commissioner,
112 T.C. 19, 23 (1999); Keller v. Commissioner, T.C. Memo. 2006-
166; Fowler v. Commissioner, T.C. Memo. 2004-163.
A. Exceptional Circumstances
Petitioners assert that “There are so many unique and
equitable facts in this case that this case is an exceptional
circumstance” and respondent abused his discretion by not
accepting those facts as grounds for an offer-in-compromise. In
support of their assertion, petitioners argue: (1) The
longstanding nature of this case justifies acceptance of the
offer-in-compromise; (2) respondent’s reliance on an example in
the Internal Revenue Manual (IRM) was improper; and (3)
respondent failed to consider petitioners’ other “equitable
facts”.
1. Longstanding Case
Petitioners assert that the legislative history requires
respondent to resolve “longstanding” cases by forgiving penalties
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Last modified: May 25, 2011