- 8 - Internal Revenue Manual (IRM) section 5.8.11.2.1; she also noted that petitioners had two other vehicles. Finally, she reduced petitioners’ other expense of $1,300 to $255, noting that petitioners had not substantiated the $1,300 but that $255 represented the average amount of attorney’s fees paid by petitioners in the preceding 29 months. Cochran concluded that petitioners’ monthly income was $2,806 (reported income of $2,516 + $290), that petitioners’ monthly expenses totaled $3,495 (reported amount of $5,429 - $6 - $405 - $478 - $1,300 + $255), and that petitioners had had no monthly excess income or future income potential. Cochran also observed that petitioners received in 2004 a $65,700 taxable distribution from an individual retirement account. Cochran noted that petitioners’ monthly allowable expenses of $3,495 exceeded their monthly income of $2,806 by $689 and allotted $8,268 ($689 x 12) of the $65,700 distribution to the payment of petitioners’ necessary living expenses. Cochran considered the balance of the distribution, $57,432, to be a dissipation of assets and factored that balance into petitioners’ reasonable collection potential. Cochran concluded that petitioners’ net realizable equity in their assets wasPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011