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In evaluating petitioner’s original offer in compromise, the
revenue officer reviewed bank statements and canceled checks from
petitioner’s business and personal checking accounts. He found
that petitioner had commingled his business and personal funds in
these accounts. The revenue officer also found that petitioner’s
bank deposits exceeded the sources of income shown on his
original offer in compromise. For the 10-month period reflected
on the “Income and Expense Analysis” section of the Form 433-B,
the actual deposits into the business account ($42,861.66)
exceeded the reported sources of income on the original offer in
compromise ($25,470) by $17,391.66. The revenue officer returned
the case to the Appeals officer with his findings.
The revenue officer calculated petitioner’s future monthly
disposable income, described by respondent as an estimate of a
taxpayer’s ability to pay based on an analysis of gross income,
less necessary living expenses, for a specific number of months
into the future, to be $991.17.3 That calculation provided for
$70 in monthly transportation expenses (as claimed on
petitioner’s Form 433-A), accounted for the excess deposits,
reflected the net income from petitioner’s business, and allowed
various other expenses. The calculation was as follows:
3 The revenue officer made other findings and
calculations which need not be detailed here.
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Last modified: May 25, 2011