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Economic hardship: We must figure out whether Motsko will
suffer economic hardship if his request for relief is not
granted. The revenue procedure refers us to the regulation in
section 301.6343-1(b)(4), Proced. & Admin. Regs., which defines
economic hardship as the inability to pay reasonable basic living
expenses if taxes were paid instead. In Motsko’s case, those
taxes (and penalties) total over $57,000. As for his living
expenses, section 301.6343-1(b)(4), Proced. & Admin. Regs.,
directs us to consider such factors as the cost of living in
Alaska, how much of Motsko’s property is exempt from levy, his
earning ability, and any extraordinary circumstances.
Motsko reported on a “Collection Information Statement for
Wage Earners” (an IRS form submitted in support of his request
for relief) that his monthly wages were $5,154 and that his
monthly expenses (including about $800 a month for his daughter’s
hockey programs) were $7,527,3 leaving him with a monthly deficit
of $2,373.4 The current allowable living expenses for a two-
3 Motsko listed his monthly expenses:
Food, clothing and misc. $ 1,170
Housing and utilities 2,963
Transportation 92
Health care 326
Taxes (income and FICA) 1,024
Other expenses 1,952
Total living expenses 7,527
4 Motsko gave no evidence to the revenue agent to
corroborate his income or expenses, but under Ewing we considered
the evidence he presented at trial anyway.
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Last modified: May 25, 2011