Roger and Lora Carter - Page 11

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               Using Mrs. Carter’s pay stubs from the first two months of             
          2004, respondent adjusted Mrs. Carter’s gross monthly income                
          upward to $916.  Respondent included only 41 months of Mrs.                 
          Carter’s future income.                                                     
               Respondent accepted petitioners’ monthly expenses as                   
          reported but adjusted their housing and utilities expense and tax           
          expense downward to $1,170 and $915, respectively.  Regarding the           
          possible future increases in expenses outlined in petitioners’              
          May 14, 2004 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 income and            
          expenses, respondent determined that $162,439 was collectible               
          from petitioners’ future income.  Respondent concluded that                 
          petitioners had the ability to pay $380,706.                                
               Because petitioners had the ability to pay substantially               
          more than the amount offered, respondent rejected their offer-in-           
          compromise based on doubt as to collectibility with special                 
          circumstances.  Respondent also rejected petitioners’ effective             
          tax administration offer-in-compromise based on economic hardship           
          because they had the ability to pay their tax liability in full.            
          Finally, respondent rejected petitioners’ effective tax                     
          administration offer-in-compromise based on public policy or                






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Last modified: May 25, 2011