Arthur A. Lemann III and Roberta A. Lemann - Page 7

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          revised Form 433-A.  The offer specialist reduced that amount to            
          a "quick sale" value4 of $100,000, which she offset with                    
          petitioners' reported $60,000 of indebtedness encumbering the               
          residence, yielding net realizable equity of $40,000.  Similarly,           
          the offer specialist accepted petitioners' $2,000 estimate of the           
          value of their two automobiles and discounted it to a $1,600                
          quick sale value.  Overall, the offer specialist's final                    
          computation of petitioners' net realizable equity was $41,600.              
               With respect to future income, the offer specialist adjusted           
          petitioners' reported monthly gross income and necessary living             
          expenses as follows.  She increased reported monthly wages by               
          $412 to reflect the amounts included on petitioners' Forms W-2,             
          Wage and Tax Statement, for 2001, and added monthly dividend                
          income of $200 to reflect dividend income reported on                       
          petitioners' 2001 joint Federal income tax return.  Thus,                   
          petitioners' gross monthly income was increased from $7,715 to              
               Regarding monthly necessary living expenses, the offer                 
          specialist followed Internal Revenue Manual (IRM) guidelines and            
          reduced petitioners' reported monthly transportation expenses               
          from $680 to $289 and disallowed petitioners' claimed $1,600                
          monthly expense for credit cards.  She also increased                       

               4 Quick sale value is defined as the estimate of the price a           
          seller could get for an asset in a situation where financial                
          pressures motivate a sale in a short time, usually 90 days or               
          less.  IRM, sec. (Nov. 2000).                                     

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