The one interesting tidbit comes on page 8 where the court brings up the abuse of discretion argument. For the relevant citations: "We review the settlement officer's administrative determinations regarding nonliability issues for abuse of discretion. Hoyle v. Commissioner, 131 T.C. 197, 200 (2008). Abuse of discretion exists when a determination is arbitrary, capricious, or without sound basis in fact or law. See Murphy v. Commissioner, 125 TC 301, 320 (2005), aff'd 469 F.3d 27 (1st Circ. 2006)."
In this case the court considered the following:
- Properly verified that the requirements of any applicable law or administrative procedure have been met;
- Considered any relevant issues petitioner raised; and
- Determined whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection action be no more intrusive than necessary.
The second major take away is, "It is not an abuse of discretion for a settlement officer to decline to consider a collection alternative where the taxpayer does not place a specific proposal on the table." So, when looking to advance this type of argument, and really any time a practitioner works with a settlement officer, the practitioner should always have an alternative to the IRS action.
Relevant Cite: TC Memo 2016-134
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