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standard expenses, $933 for housing costs based on a family of
one in Pierce County, $292 for transportation, $575 for taxes,3
and $55 for union dues, etc. Appeals Officer Otterson concluded
that petitioner had the ability to pay $472 per month--the net
difference between petitioner’s monthly income and monthly
allowable expenses--toward his outstanding 1989, 1990, 1991,
1992, 1993, and 1994 tax liabilities. Appeals Officer Otterson
also noted the net value of the assets petitioner listed on the
Form 433-A.
3 The Appeals officer arrived at petitioner’s monthly tax
figure by (1) annualizing the monthly income figure provided by
petitioner, (2) applying the year 2000 income tax rates and FICA
tax rate to this amount, and then (3) dividing the total amount
of tax by 12:
Petitioner’s annual income equaled $34,572: $2,881 (the
monthly income figure provided by petitioner) x 12.
Petitioner’s annual FICA tax equaled $2,645: $34,572 x
7.65%. Sec. 3101(a) and (b).
The Appeals officer subtracted the standard deduction
($2,800 for 2000) and a personal exemption ($4,400 for 2000) from
petitioner’s annual income figure to arrive at petitioner’s
annual taxable income of $27,372: $34,572 - $2,800 - $4,400.
Secs. 63, 151. Per the year 2000 tax table, petitioner’s annual
income tax equaled $4,253. Sec. 1.
Petitioner’s total annual FICA and income taxes equaled
$6,898: $2,645 (FICA) + $4,253 (income tax). Thus, petitioner’s
monthly tax equaled $575: $6,898 � 12.
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