Davis and Lois Etkin - Page 20

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        expectation, applying the reasonable expense criteria5 of the IRM             
        to reach a payment plan that would reflect their actual ability to            
        pay off the tax liability timely.  Petitioners argue that                     
        respondent abused his discretion in determining that their                    
        proposed installment agreement did not reflect their ability to               
        pay and thus upholding the revenue agent’s determination, based on            
        the financial statement, that petitioners could afford to pay                 
        $4,912 per month for the first year, and $7,106 per month                     
        thereafter.  Petitioners further argue that the record does not               
        reflect the reasoning behind the revenue agent’s calculation of               
        what they can afford to pay and suggest it may be a subjective                
        opinion.  Petitioners also suggest that the Appeals Office simply             
        took the actions of the revenue agent at face value without coming            
        to an independent determination of what was an acceptable payment             
        plan.                                                                         
             We conclude that respondent did not abuse his discretion in              
        determining that petitioners’ proposed installment agreement did              
        not reflect their ability to pay.  We also conclude that                      
        respondent did not base his determination of petitioners’ proposed            
        installment agreement on a subjective formula.  The revenue agent             
        computed the monthly installment payment under the guidelines of              


               5Pursuant to the criteria in the IRM, the Appeals officer              
          determined that a number of the expenses petitioners claimed on             
          their financial statements were not allowable.  See IRM sec.                
          5.15.1.3 (2000).                                                            





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