Gary and Johnean Hansen - Page 10

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          that she had decided to stay collection activity relating to                
          interest amounts while petitioners’ interest abatement case for             
          1989 was pending in this Court.                                             
               This case is another in a long list of cases brought in this           
          Court involving respondent’s proposal to levy on the assets of a            
          partner in a Hoyt partnership to collect Federal income taxes               
          attributable to the partner’s participation in the partnership.             
          Petitioners argue that Appeals was required to let them pay                 
          $90,258 to compromise their estimated $260,143 Federal income tax           
          liability for 1987 through 1998.  Where an underlying tax                   
          liability is not at issue in a case invoking our jurisdiction               
          under section 6330(d), we review the determination of Appeals for           
          abuse of discretion.  See Sego v. Commissioner, 114 T.C. 604, 610           
          (2000); see also Clayton v. Commissioner, T.C. Memo. 2006-188;              
          Barnes v. Commissioner, T.C. Memo. 2006-150.  We reject the                 
          determination of Appeals only if the determination was arbitrary,           
          capricious, or without sound basis in fact or law.  See Cox v.              
          Commissioner, 126 T.C. 237, 255 (2006); Murphy v. Commissioner,             
          125 T.C. 301, 308, 320 (2005), affd. 469 F.3d 27 (1st Cir. 2006).           
               Where, as here, we decide the propriety of Appeals’s                   
          rejection of an offer-in-compromise, we review the reasoning                
          underlying that rejection to decide whether the rejection was               
          arbitrary, capricious, or without sound basis in fact or law.               

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