- 12 - 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.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011