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Mr. Marine also determined that certain “life-style choices”
made by petitioners, namely, petitioners’ purchase of whole life
insurance rather than less costly term insurance and petitioners’
decision to send their children to private rather than public
school, gave rise to increased expenses that could not be
considered in determining petitioners’ necessary living expenses
for offer in compromise purposes.
d. The Final Exchange of Correspondence
Petitioner was advised that the seventh offer had been
rejected in a telephone call initiated by Mr. Marine on February
12, 1997. Petitioner was also advised of the bases on which the
offer had been rejected, specifically including Mr. Marine’s
application of the local standards for housing and utilities.
Prior to this conversation, petitioner had not been aware of the
local standards.
7(...continued)
1995) provides in part as follows:
The housing and utilities standard will provide the
basis for determining whether a taxpayer will be
required to pay the Service an amount equal to
excessive or not-allowable housing expenses. When
deciding whether a taxpayer should be required to pay
the Service an amount equal to excessive or not-
allowable housing expenses, consider:
(1) the increased cost of transportation to work
and school which would result from moving to lower-cost
housing;
(2) the tax consequences which would result from
selling a home. * * * ; and
(3) the cost of moving to a new residence.
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