Alan M. and Marcia F. Schulman - Page 14

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          utilities.  See 2 Administration, Internal Revenue Manual (CCH),            
          sec. (2), at 17,657 (“Taxpayers will be allowed the            
          local standard or the amount actually paid, whichever is less”).            
               The settlement officer allowed $400 of medical expenses on             
          the basis of average monthly premiums, copays, and miscellaneous            
          medical supplies or needs.  Petitioners claim that $695 in                  
          medical expenses should have been allowed, which amount they                
          claim to be their “actual out-of-pocket health insurance, copays,           
          things like that.”  However, it is clear that the settlement                
          officer did not accept those additional amounts, because                    
          petitioners provided no substantiation.  See 2 Administration,              
          Internal Revenue Manual (CCH), sec., at 17,655:              
          “A taxpayer is required to provide evidence and justification for           
          claimed expenses, except National Standards”.9  Petitioners                 
          presented no evidence at trial or on brief to otherwise                     
          substantiate their expenses.10  We hold that the settlement                 

               9See also sec. 301.6330-1(e)(1), Proced. & Admin. Regs.:               
          “Taxpayers will be expected to provide all relevant information             
          requested by Appeals, including financial statements, for its               
          consideration of the facts and issues involved in the hearing.”             
               10At trial, Mr. Schulman testified:                                    
               Q    Mr. Schulman, did you ever provide Ms. Wastian any                
               evidence of your medical expenses?                                     
               A    Yes.  They’re on a schedule.                                      
               Q    But did you provide them to her when you conferred                
               with her?                                                              

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