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new or updated financial statement if the financial information
is more than 12 months old and/or the information is no longer
accurate. Despite his requests, petitioners did not provide
updated financial information. Because of petitioners’ failure
to provide updated financial information, and the fact that the
only financial information in the administrative record remained
the financial statement, the Appeals officer considered the
financial information from the hearing for the taxable years
1997-99.
3. Notice of Determination for the Taxable Year 2000
On September 16, 2003, respondent issued a notice of
determination upholding the proposed lien under section 6320 for
the taxable year 2000. On the same date, respondent also issued
a notice of determination denying Lois Etkin equitable relief
under section 6015(f). The Appeals officer concluded that even
though petitioners proposed to fully pay their outstanding income
tax liabilities over 5 years, they did not qualify for the 5-year
rule as set forth by IRM sec. 5.15.1.3(4) (2000)2 because (1) they
did not provide the Appeals officer with an updated financial
2 Internal Revenue Manual (IRM), sec. 5.15.1.3(4) (2000)
provides for a “five-year” rule that excessive necessary and
conditional expenses may be allowed if the tax liability,
including projected accruals, will be fully paid within 5 years.
“Excessive necessary” and “conditional expenses” are expenses
that do not meet the test for “necessary expenses”, which must
provide for a taxpayer and his family’s health and welfare and/or
the production of income. See IRM sec. 5.15.1.3(2) (2000).
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