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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 a
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Last modified: May 25, 2011