William H. and Jo Anne Lindley - Page 19

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          petitioners’ reasonable collection potential, we find that those            
          errors were harmless because, even when corrected, petitioners’             
          reasonable collection potential exceeds their offer amount.                 
               1.   Petitioners’ Income and Expenses                                  
                    a.   Housing and Utilities Expense                                
               Section 7122(c)(2)(A) provides that “the Secretary shall               
          develop and publish schedules of national and local allowances              
          designed to provide that taxpayers entering into a compromise               
          have an adequate means to provide for basic living expenses.”               
          Section 7122(c)(2)(B) provides that the national and local                  
          allowances should not be used “to the extent such use would                 
          result in the taxpayer not having adequate means to provide for             
          basic living expenses.”                                                     
               Mr. Owens used national and local standards to determine               
          petitioners’ allowable housing and utilities expense, including             
          their second mortgage expense.  Petitioners assert that, by not             
          allowing their actual expenses, they will not have adequate means           
          to provide for basic living expenses.  However, petitioners did             
          not provide any information to Mr. Owens or to the Court showing            
          that they would be unable to provide for basic living expenses if           
          only allowed the national and local standards.  Given the lack of           


               12(...continued)                                                       
               Petitioners do not dispute respondent’s reduction of their             
          transportation expenses.                                                    





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