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verify this assertion and to determine whether petitioner earned
income from the corporation.
Respondent also was entitled to request information
concerning petitioner’s living arrangements. Petitioner
testified that he refused to provide income information for Ms.
Bernd because he did not wish to impose upon her. The Internal
Revenue Manual (IRM) provides, however, that where a taxpayer
shares living expenses with a person who is not liable for the
taxes owed, the offer investigator “should secure sufficient
information concerning the not liable person to determine the
taxpayer’s proportionate share of the total household income and
expenses.” IRM sec. 5.8.5.5.3(3) (May 15, 2004). This
information allows the investigator to “Determine which expenses
are shared and which expenses are the sole responsibility of the
taxpayer.” IRM sec. 5.8.5.5.3(3)a and d.4
Petitioner also failed to provide a breakdown of the amount
he paid toward his living expenses or to include in his OIC the
value of the constructive income he received from Ms. Bernd.
See, e.g., Langlois v. Commissioner, T.C. Memo. 1988-415 n.7
(income includes payment in kind for services rendered), affd.
4 We have held that reliance on IRM guidelines in evaluating
collection alternatives does not constitute an abuse of
discretion. See, e.g., Orum v. Commissioner, 123 T.C. 1, 13
(2004), affd. 412 F.3d 819 (7th Cir. 2005); Etkin v.
Commissioner, T.C. Memo. 2005-245; Castillo v. Commissioner, T.C.
Memo. 2004-238; Schulman v. Commissioner, T.C. Memo. 2002-129.
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