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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