Gary and Johnean Hansen - Page 19

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          in the unenviable role of an insurer against poor business                  
          decisions by taxpayers, reducing the incentive for taxpayers to             
          investigate thoroughly the consequences of transactions into                
          which they enter.  It would be particularly inappropriate for the           
          Government to play that role here, where the transaction at issue           
          involves a tax shelter.  Reducing the risks of participating in             
          tax shelters would encourage more taxpayers to run those risks,             
          thus undermining rather than enhancing compliance with the tax              
          laws.12  See Clayton v. Commissioner, supra; Barnes v.                      
          Commissioner, supra.                                                        
               Fifth, petitioners argue that Cochran failed to balance                
          efficient collection with the legitimate concern that collection            
          be no more intrusive than necessary.  We disagree.  Cochran                 
          thoroughly considered this balancing issue on the basis of the              
          information and proposed collection alternative given to her by             
          petitioners.  She concluded that “the proposed levy action                  
          regarding the taxpayers represents the only efficient means for             

               12 Nor does the fact that petitioners’ case may be                     
          “longstanding” overcome the detrimental impact on voluntary                 
          compliance that could result from respondent’s accepting                    
          petitioners’ offer-in-compromise.  An example in IRM sec.                   
 implicitly addresses the “longstanding” issue.  There,           
          the taxpayer invested in a tax shelter in 1983, thereby incurring           
          tax liabilities for 1981 through 1983.  He failed to accept a               
          settlement offer by respondent that would have eliminated a                 
          substantial portion of his interest and penalties.  Although the            
          example, which is similar to petitioners’ case in several                   
          respects, would qualify as a “longstanding” case by petitioners’            
          standards, the offer was not acceptable because acceptance of it            
          would undermine compliance with the tax laws.                               

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