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rather than petitioner’s submitted expenses, the Appeals officer
characterized petitioner as able to provide for basic living
expenses. Thus, the Appeals officer did not violate statutory
limits by using the tables. See sec. 7122(c)(2)(B). In
addition, petitioner has not shown that his submitted expenses
were more appropriate than the national or local averages.
Respondent’s proration of some of petitioner’s expenses was
appropriate because even though petitioner claims to incur all of
the household expenses because of his wife’s disability and lack
of income, information returns show that his wife still generates
passive income. While that income should not be considered in
determining petitioner’s collection potential, it should be
considered in determining petitioner’s responsibility for shared
living expenses. 1 Administration, Internal Revenue Manual
(CCH), sec. 5.8.5.5.3, at 16,342. Accordingly, respondent’s use
of the national and local averages combined with a prorated
expense allowance was a reasonable way to estimate petitioner’s
expenses.
The denial of petitioner’s offers was based on objective
computations of petitioner’s disposable income and assets,
computed separately for each offer. The revenue officer even
considered the alleged decrease, to 25 percent, in petitioner’s
equity ownership in the home between the first and the second
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Last modified: May 25, 2011