Robert A. and Nanci M. Spurgin - Page 13




                                       - 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

Last modified: May 25, 2011