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settlement officer informed petitioners that, under those
procedures, she could not allow expenses for unsecured debt as
they had claimed. She also informed them that certain other
expenses they had claimed had not been substantiated. She
provided petitioners considerable time and opportunity to submit
additional information to substantiate expenses they had
previously claimed, but which were disallowed, and to submit
evidence of any “special circumstance”. The settlement officer
offered a 1-year period for petitioners to modify their spending
habits and lifestyle before full monthly payments would be
required.
Petitioners submitted additional information, however, they
continued to claim expenses which were previously disallowed and
which they had been told could not be allowed. They did not
provide substantiation for certain expenses, e.g., medical
expenses, but, nevertheless, they continued to claim those
expenses. Petitioners’ letter of July 6, 2001, shows clearly
that an installment agreement could not be reached by the parties
given the wide disparity in petitioners’ claimed expenses and the
expenses allowable under the Internal Revenue Manual guidelines.
Indeed, in that letter petitioners claimed expenses in amounts
6(...continued)
necessary expense test, but which may be allowable if the tax
liability, including projected accruals, can be fully paid within
five years.
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Last modified: May 25, 2011