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respondent’s Appeals Office with respect to the proposed
collections action under the abuse of discretion standard. Goza
v. Commissioner, 114 T.C. 176 (2000). Under this standard, the
Court shall consider whether the actions of the Appeals Office in
rejecting petitioner’s OIC and thus, sustaining respondent’s
proposed collections action, were arbitrary, capricious, or
without sound basis in law. See Sego v. Commissioner, 114 T.C.
604, 610 (2000); Woodral v. Commissioner, 112 T.C. 19, 23 (1999).
Petitioner argues that respondent’s Appeals Office abused
its discretion in rejecting both proposed OICs because it did not
consider that a levy upon petitioner’s remaining IRA, a periodic
payments account structured under section 72(t)(4), would trigger
the recapture tax in such a manner that petitioner would be
essentially left with little or no assets to live on until the
time that he would be eligible to receive Social Security.
Moreover, petitioner argues that respondent’s Appeals Office
ignored evidence that he was unable to work, and that his offers
were reasonable in the light of his considerable and necessary
monthly expenses.
Generally, amounts distributed from an IRA are includable in
gross income as provided in section 72. Sec. 408(d)(1). Section
72(t)(1) further provides: “If any taxpayer receives any amount
from a qualified retirement plan * * * the taxpayer’s tax under
this chapter for the taxable year in which such amount is
received shall be increased by an amount equal to 10 percent of
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