- 13 - to reconsider petitioners’ seventh offer. Mr. Marine agreed to do so. On February 12, 1997, Mr. Marine rejected petitioners’ seventh offer on the ground that the amount of the offer was inadequate. In this regard, Mr. Marine determined that petitioners could afford to pay more, at least for offer in compromise purposes, than what they had offered to pay. Mr. Marine based this conclusion on his determination of the differential between petitioners’ monthly income and petitioners’ necessary living expenses. In determining petitioners’ necessary living expenses, Mr. Marine considered, inter alia, costs for housing and utilities, educational costs for petitioners’ children, and costs for life insurance. Mr. Marine determined costs for housing and utilities by reference to “local standards” that were developed by respondent’s National Office, based on data provided by the Census and the Bureau of Labor Statistics, and published in the Internal Revenue Manual on November 2, 1995. IRM, sec. 5323.433(3)(a). Because petitioners’ actual costs for housing and utilities exceeded the maximum allowance set forth in the local standards for Orange County, California, Mr. Marine utilized the local standards.7 7 In discussing the purpose behind the local standards, Internal Revenue Manual, sec. 5323.433(3)(a)(1)-(3) (Nov. 2, (continued...)Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
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