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A. Economic Hardship
Petitioner asserts that Ms. Cochran abused her discretion by
rejecting his offer-in-compromise because “There is no indication
that SO Cochran gave any substantive consideration to
petitioner’s demonstrated special circumstances or that he would
experience a hardship if required to make a full-payment.” In
support of this assertion, petitioner argues Ms. Cochran: (1)
Failed to adequately consider his health issues; (2) failed to
consider that because of current and future health issues
petitioner will retire early, causing his income to decrease; (3)
improperly valued petitioner’s real property; and (4) failed to
use actual housing and utility expenses to determine his total
monthly living expenses.
Section 301.6343-1(b)(4)(i), Proced. & Admin. Regs., states
that economic hardship occurs when a taxpayer is “unable to pay
his or her reasonable basic living expenses.” Section 301.7122-
1(c)(3), Proced. & Admin. Regs., sets forth factors to consider
in evaluating whether collection of a tax liability would cause
economic hardship, as well as some examples. One example
involves a taxpayer who provides full-time care to a dependent
child with a serious long-term illness. A second example
involves a taxpayer who would lack adequate means to pay his
basic living expenses if his only asset was liquidated. The
third example involves a disabled taxpayer who has a fixed income
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