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loan money proceeds were used to help finance the development of
the optical network optimization software at a time when the
anticipated return was many times the amount of the loans.” They
also described their house as “extensively modified to include
facilities to operate a successful consulting business”,
mentioning that rooms were used to store books, records, and
equipment, as well as to meet with clients. By way of apparent
analogy and without any support, they then “respectfully
[suggested] that a $5,000 or $6,000 per month business expense
for renting commercial office space would be allowed with very
little scrutiny.”
Mr. Skidmore, in his analysis of petitioners’ financial
circumstances for purposes of collection alternatives did not
accept housing expenses in excess of the standard allowance. He
also removed a claimed $2,959 life insurance expense from the
computation. Petitioners’ explanation of that expense, in their
October 27, 2003, letter had likewise been limited to a
generalized: “U.S. Bank required Mr. Cox to have a life
insurance policy for the lines of credit which were approved
based on the business income as well as the equity in the house.
The whole-life policy also provides a potential ‘line of credit’
for the business.” Petitioners allege on brief that
Mr. Skidmore’s failure to consider their business rationale for
these expenses reveals an abuse of discretion.
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