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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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