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equity by $164,155 to $185,845 to reflect the amount outstanding
on the first and second mortgages. Respondent concluded that
petitioners had a total net realizable equity of $310,011.
Respondent accepted petitioners’ reported gross monthly
income of $5,252 but made the following adjustments to their
monthly expenses: (1) Reduced the housing and utilities expense
from $1,756 to $1,254 because petitioners failed to document that
they were entitled to an amount higher than the local guideline
amount; and (2) disallowed the other expenses of $458 because
petitioners failed to itemize expenses, but allowed the $460 of
“other secured debt” because Ms. Cochran believed that amount
represented the attorney’s fees being paid to Ms. Merriam’s law
firm. Regarding the possible future increases in expenses
outlined in petitioners’ letters, respondent determined that
these were “general projections from the taxpayers’
representative and may never, in fact, be incurred” and thus did
not take them into account.
After making adjustments to petitioners’ monthly expenses,
respondent determined that $70,065 was collectible from their
future income.8 Respondent concluded that petitioners had a
reasonable collection potential of $380,076.
8 Respondent determined that petitioners had monthly
disposable income of $865 and multiplied this by 81, the number
of months remaining on the collection statute.
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Last modified: May 25, 2011