Roger and Lora Carter - Page 18

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          specifically addressed in the notice of determination was not an            
          abuse of discretion.                                                        
               2.   Petitioners’ Income and Future Expenses                           
               Petitioners assert that Ms. Cochran erroneously determined             
          their future income and expenses by:  (1) Considering 86 months             
          of petitioners’ future income instead of 48 months; and (2)                 
          failing to adequately consider their age, health, retirement                
          status, medical costs, and the likelihood of future increases in            
          medical and housing costs.  Petitioners’ arguments are not                  
          persuasive.                                                                 
               Section 5.8.5.5 of the IRM provides that, when a taxpayer              
          makes a cash offer to compromise an outstanding tax liability,              
          only 48 months of future income should be considered.                       
          Petitioners made a cash offer, but Ms. Cochran used 86 months of            
          future income.13  At trial, Ms. Cochran acknowledged that she               
          should have used only 48 months of future income.  Ms. Cochran              
          recomputed petitioners’ reasonable collection potential using 48            
          months and determined that it was $304,782, instead of $380,706,            
          as reflected in the notice of determination.  Ms. Cochran                   
          testified that the change would not have had an effect on her               
          final determination because, using either calculation,                      
          petitioners’ reasonable collection potential was greater than               

               13  Ms. Cochran included 41 months of petitioners’ future              
          wage income and 45 months of Mr. Carter’s future monthly pension            
          payments.                                                                   




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