- 7 - 19, 23 (1999). Acting without a sound basis in fact or law means that an agency such as the IRS “makes an error of law * * * or rests its determination on a clearly erroneous finding of fact * * * [or] applies the correct law to facts which are not clearly erroneous but rules in an irrational manner.” United States v. Sherburne, 249 F.3d 1121, 1125-26 (9th Cir. 2001); see also Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 402-03 (1990). Industrial serves up a gallimaufry of arguments that the Commissioner abused his discretion, but we focus on four: (1) the cover letter sent to Talbott was an impermissible ex parte communication; (2) Industrial was denied a face-to-face hearing in a location close to its place of business; (3) Talbott unilaterally scheduled a date and time for the CDP hearing without consulting Industrial; and (4) Talbott ignored evidence of the agreement settling Industrial’s deficiency case while it was on appeal. Industrial also requests an award of litigation costs under section 7430. 1. Ex Parte Communication Section 6330 sets out the process for administrative review of decisions by the IRS to levy taxpayers’ property. One of the protections that section gives taxpayers is a promise that the hearing will be conducted by an IRS employee who is impartial. Sec. 6330(b)(3). Congress reinforced this requirement by directing the Commissioner to reorganize the IRS so that thePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: November 10, 2007