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Petitioner subsequently submitted the documentation
requested by the Appeals officer, and, in a memorandum dated
May 30, 2002, the Appeals officer concluded that petitioner was
then in compliance with the filing requirements. Thus, the
revenue officer proceeded to consider petitioner’s offer in
compromise.
The revenue officer to whom petitioner’s offer in compromise
was referred by the Appeals officer considered the financial
information that petitioner had submitted, including bank
records. The information submitted by petitioner claimed that
his total monthly income was $1,812 and that his total monthly
living expenses were $2,059, reflecting a monthly financial
deficit. The revenue officer concluded that the income shown by
petitioner was not consistent with the bank deposits reflected on
his monthly statements and that the net business income reported
by petitioner was not reliable because the claimed business
expenses were commingled in the bank account with personal
expenses. The revenue officer calculated petitioner’s ability to
pay based on the value of his vehicle and his average monthly
bank deposits, less necessary living expenses, and concluded that
the amount of $59,676 was the reasonable collection potential
“based on cash offer” shown by the information petitioner had
submitted.
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Last modified: May 25, 2011