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Monthly total income
Net business income $ 477.00
Monthly excess deposits 1,739.17 $2,216.17
($17,391.66/10 months)
Monthly total expenses
National standard expenses1 $ 383.00
Housing and utilities 400.00
Transportation 70.00
Taxes (income & FICA) 120.00
Life insurance 34.50
Child support 217.50 (1,225.00)
Disposable income $ 991.17
1The Internal Revenue Manual provides procedures for
evaluating proposed installment agreements and offers in
compromise. See 2 Administration, Internal Revenue Manual
(CCH), sec. 5.15.1 to 5.15.1.4, at 17,653-17,660. Those
procedures contain guidelines for allowable expenses, which
include necessary and conditional expenses. Necessary
expenses are those reasonable expenses that provide for a
taxpayer’s and his or her family’s health and welfare and/or
the production of income. Id. sec. 5.15.1.3.2, at 17,656.
There are three types of necessary expenses: (1) Those based
on national standards; e.g., food, housekeeping supplies,
apparel and services, and personal care products and
services; (2) those based on local standards; e.g., housing,
utilities, and transportation; and (3) other expenses, which
are not based on national or local standards; e.g., health
care. Id. sec. 5.15.1.3.2.1 to 5.15.1.3.2.3, at 17,656-
17,657.
Petitioner’s original offer in compromise, dated August 31,
2000, proposed to settle the 1993 through 1999 years with a
single cash payment of $720. In a telephone conference, the
Appeals officer informed petitioner’s counsel that he could
recommend an offer in compromise for $24,000, payable in 48
monthly installments of $500. Thereafter the Appeals officer
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Last modified: May 25, 2011