Mark Fowler and Joylyn Souter-Fowler - Page 11

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          instead, used the national statistical amount as an estimate of             
          petitioners’ expenses.  The use of the national averages for                
          petitioners’ expenses resulted in petitioners’ monthly expenses             
          exceeding their monthly income by $36.  Therefore, by using the             
          average expense figure, petitioners’ income was $136 short of               
          producing the $100 per month needed to compromise their tax                 
          liabilities for $2,400.  We note that, percentagewise, the                  
          shortfall is less than 3 percent of petitioners’ gross income.              
          The Appeals officer chose to use the national statistical                   
          averages rather than the expense figures provided by petitioners.           
          If the Appeals officer had used petitioners’ submitted expense              
          figure of $3,989, petitioners would have had $619 monthly and               
          would have been financially capable of satisfying the $100                  
               The Appeals officer is allowed to use the national schedules           
          when considering the facts and circumstances of this case.                  
          However, if use of the schedules results in petitioners’ not                
          having adequate means to provide for basic living expenses, as              
          here when the Appeals officer determined a negative $36 amount              
          for basic living expenses, an installment offer may not be                  
          appropriate.  See sec. 7122(c)(2)(B).                                       
               Under the regulations for doubt as to collectibility cases:            
                    A determination of doubt as to collectibility will                
               include a determination of ability to pay.  In                         
               determining ability to pay, the Secretary will permit                  
               taxpayers to retain sufficient funds to pay basic                      

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Last modified: May 25, 2011