- 8 - Section 7122(c) provides that the Secretary shall prescribe guidelines for IRS personnel to determine whether an OIC is adequate and should be accepted. These guidelines have been published and include certain provisions of the Internal Revenue Manual (IRM). See Lemann v. Commissioner, supra; Spurgin v. Commissioner, T.C. Memo. 2001-290. IRM sec. 5.8.5.5 (Nov. 15, 2004) provides guidelines for calculating a taxpayer’s future income. “Future income is defined as an estimate of the taxpayer’s ability to pay based on an analysis of gross income, less necessary living expenses, for a specific number of months into the future.” IRM sec. 5.8.5.5(1) (Nov. 15, 2004). For cash offers, income and expenses are estimated for a 48-month period. Id. The calculation of future income should take into account “the taxpayer’s overall general situation including such facts as age, health, marital status, number and age of dependents, highest education or occupational training and work experience.” IRM sec. 5.8.5.5(3) (Nov. 15, 2004). The IRM provides that “Some situations may warrant placing a different value on future income than current or past income indicates”. IRM sec. 5.8.5.5(5) (Nov. 15, 2004). For example, if income or necessary expenses will increase or decrease, then the amount or number of expected payments should be adjusted accordingly. Id. If a taxpayer is “temporarily unemployed or underemployed”, then income should be calculated as if the taxpayer were fully employed. Id. If aPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011