Gary W. McDonough - Page 19

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                   4.   Petitioner’s Other “Financial Circumstances”                  
              Petitioner argues that pursuant to section 7122(c)(2),                  
         respondent was required to include actual housing and utility                
         expenses when determining his total monthly living expenses, not             
         the Internal Revenue Service standard allowances.  Section                   
         7122(c)(2) provides that the Secretary shall publish standard                
         allowances for basic living expenses.  The Commissioner may                  
         depart from standard allowances where “such use would result in              
         the taxpayer not having adequate means to provide for basic                  
         living expenses.”  Sec. 7122(c)(2)(B).                                       
              Ms. Cochran determined petitioner’s circumstances “[were]               
         not sufficient to deviate from the local guideline amounts”.                 
         Petitioner did not produce evidence indicating he would not have             
         adequate means to provide for his basic living expenses.  Ms.                
         Cochran did not abuse her discretion by using standard allowances            
         instead of petitioner’s actual housing and utility expenses.                 
              Petitioner also asserts Ms. Cochran abused her discretion by            
         failing to inquire about changes in his financial circumstances              
         after the offer-in-compromise had been submitted.  The record                
         does not indicate petitioner’s financial situation had                       
         substantially changed from the date the offer was submitted on               
         March 24, 2000, through the date of its denial on December 16,               
         2004.  Ms. Cochran did not abuse her discretion.                             

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