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retain the money received from the pension to pay for future
increases in expenses. As discussed above, petitioners’
assertions regarding future expenses are speculative and
unsupported, and it was not arbitrary or capricious for Ms.
Cochran to ignore such costs. The use of Mr. Carter’s monthly
pension payments in calculating petitioners’ reasonable
collection potential was not arbitrary or capricious.
Petitioners also raise challenges to various other
determinations made by Ms. Cochran, including: (1) The increase
of petitioners’ wages from the amounts reported; (2) the
reduction of their housing expense and tax expense; and (3) the
disallowance of $600 in monthly insurance payments.15 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 $173,406. This amount
15 The monthly insurance payments were not reported by
petitioners on their Form 433-A, but instead were discussed in
their May 14, 2004, letter regarding the offer amount.
Petitioners were covered by insurance through Mr. Carter’s
employment. However, they would not be covered once he retired.
Apparently, the $600 payment reflects petitioners’ estimate of
their monthly insurance payments once Mr. Carter retires.
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