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We turn now to petitioners’ contentions, as best we
understand them, in support of their argument that interest
should be abated for the period from September 19, 1994, to
February 12, 1997.
Petitioners contend that application of the local standards
for housing and utilities to a taxpayer’s offer in compromise is
a ministerial act that does not require the exercise of
discretion and that respondent committed a “ministerial error” by
failing to apply the local standards to petitioners until they
submitted their seventh offer. We disagree for several reasons.
First, we are not convinced that the premise of petitioners’
contention is correct. Although application of the local
standards for housing and utilities is, in the first instance,
mechanical in nature, the revenue officer is nonetheless
authorized to decide whether a taxpayer should be required to pay
an amount equal to excessive or unallowable housing expenses or,
in contrast, whether the taxpayer should be allowed an amount in
excess of the local standard. In this regard, respondent
instructs each revenue officer to consider three specific factors
in making this determination.14
Second, the local standards for housing and utilities that
are in issue in this case were not published in the Internal
Revenue Manual until November 2, 1995. Petitioners’ first six
14 See supra note 7.
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