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expense had not been identified. Although petitioners believe
that Cochran’s calculation should have reflected increased
medical expenses in the 48-month period and thereafter, we do not
agree. We are unable to find that petitioners ever told Cochran
with specificity that they would have to pay a greater amount of
unreimbursed medical expenses in the future. Under the facts at
hand, we consider it reasonable for Cochran to have used
petitioners’ $1,087 monthly estimate, particularly when the
estimate, if annualized, exceeded petitioners’ prior year’s
actual medical expenses. See Fargo v. Commissioner, 447 F.3d at
710 (it is not an abuse of discretion to disregard claimed
medical expenses that are speculative or not related to the
taxpayer).
Fourth, petitioners argue that Cochran did not adequately
take into account the economic hardship they claim they will
suffer by having to pay more than $32,000 as to their tax
liability. We disagree. Section 301.6343-1(b)(4)(i), Proced. &
Admin. Regs., states that economic hardship occurs when a
taxpayer is “unable to pay his or her reasonable basic living
expenses.” Section 301.7122-1(c)(3), Proced. & Admin. Regs.,
sets forth factors to consider in evaluating whether collection
of a tax liability would cause economic hardship, as well as some
illustrative examples. One of the examples involves a taxpayer
who provides fulltime care to a dependent child with a serious
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