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As reflected in the notice of determination, Ms. Cochran
took into consideration the information petitioners presented,
but concluded that “these possible future expenses are general
projections from the taxpayers’ representative and may never, in
fact, be incurred. The present offer, therefore, must be
considered within the framework of present facts.” Given the
information presented to her, it was not arbitrary or capricious
for Ms. Cochran to ignore these speculative future costs in
making her final determination.
Petitioners also raise challenges to various other
determinations made by Ms. Cochran, including: (1) The
determination that their house had a value of $350,000; (2) the
inclusion of 100 percent of the value of the section 401(k) plan
account (less estimated tax and penalties); (3) the reduction of
their housing and utilities expense; and (4) the disallowance of
$460 in other expenses. We need not discuss in detail these and
other minor disputes raised by petitioners. Even assuming
arguendo that petitioners’ income, expenses, and value of assets
should have been accepted as reported, we would not find that Ms.
Cochran abused her discretion in rejecting petitioners’ offer-in-
compromise.
Ms. Cochran testified that, had she accepted the income,
expenses, and value of assets as reported, petitioners’
reasonable collection potential would have been $160,146.
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