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Respondent accepted the gross monthly income and expenses
petitioner reported on the Form 433-A, but with one exception.
Respondent reduced the housing and utilities expense to $1,102,
resulting in total monthly expenses of $4,004 instead of $4,156.
Because $4,004 exceeded petitioner’s gross monthly income of
$3,929, respondent determined that petitioner did not have future
disposable income that could fund an offer-in-compromise.
However, respondent determined that petitioner’s mortgage would
be paid off in 4 years. Petitioner’s monthly mortgage payment
was $795, and because his current monthly expenses exceeded his
income by $75, respondent determined that petitioner would have
$720 a month to fund the offer-in-compromise after the mortgage
was paid off. Respondent concluded that over the remaining
collection period there was an “amount collectible from retired
debt” of $51,120. Regarding the possible future increase in
expenses outlined in petitioner’s letters, respondent determined
that these were “general projections from the taxpayers’
representative and may never, in fact, be incurred” and thus did
not take these into account. Respondent concluded that
petitioner had the ability to pay $503,834 ($452,714 + $51,120).
Because petitioner had the ability to pay substantially more
than the $157,824 offered, respondent rejected petitioner’s
offer-in-compromise based on doubt as to collectibility with
special circumstances. Respondent also rejected petitioner’s
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