Russel S. Bankson - Page 10

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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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