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she decided that the offer in compromise was unacceptable. The
one exception was her disallowance of an expense characterized by
petitioner as being attributable to secured debt, when, in truth,
as petitioner later admitted, the expense was attributable to
unsecured credit card debt (which, according to the collection
information statement petitioner filled out, generally cannot be
claimed as a necessary living expense). We agree with respondent
that, since national standards for determining necessary living
standards did not enter into her decision to reject the offer in
compromise, Ms. Boudreau’s testimony on that score is irrelevant,
and we exclude it on that basis. See Fed. R. Evid. 401.
It is true that the notice of determination does not state
Ms. Boudreau’s reason (or reasons) for rejecting the offer in
compromise. An attachment to the notice states only that the
offer in compromise cannot be accepted under current IRS policy
and procedures. The parties, however, have stipulated a copy of
the Form 5402-c, Appeals Transmittal and Case Memo, submitted by
Ms. Boudreau on May 14, 2003, to her supervisor. As we have
found, the Form 5402-c does set forth in detail Ms. Boudreau’s
analysis leading to her rejection of the offer in compromise on
both of the grounds (doubt as to collectibility and effective tax
administration) put forth by petitioner. The hearing record is
clear that Ms. Boudreau rejected the offer in compromise on both
grounds advanced by petitioner, and no testimony by her on that
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