Robert A. and Nanci M. Spurgin - Page 20




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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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