Arthur A. Lemann III and Roberta A. Lemann - Page 8

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          petitioners' reported monthly expense for housing and utilities             
          by $50.  The net effect of the offer specialist's adjustments to            
          petitioners' monthly necessary living expenses was to reduce them           
          from $7,455 to $5,514.                                                      
               Overall, the offer specialist determined that petitioners              
          had $2,813 in monthly future income available to pay off their              
          tax liabilities, as compared to petitioners' reported figure of             
          $265.  The offer specialist further determined that petitioners             
          could pay this amount for 59 months, resulting in aggregate                 
          payments out of future income of $165,967.                                  
               The foregoing calculations produced a reasonable collection            
          potential of $207,567; i.e., $41,600 in net realizable equity               
          plus $165,967 in future income.  In her final report, the offer             
          specialist noted that petitioners also had some interests in                
          family corporations, interest in real property referred to as the           
          B. Lemann Building, and possibly life insurance.  She did not               
          assign any value to these assets or rely upon them in determining           
          petitioners' reasonable collection potential.5   The offer                  
          specialist concluded that petitioners had failed to demonstrate             
          any special circumstances that would justify calculating their              
          reasonable collection potential outside the prescribed                      
          guidelines.  Because the reasonable collection potential of                 

               5 The offer specialist also noted that petitioners had                 
          previously entered into an installment agreement on which they              
          had defaulted.                                                              

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