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First, Officer Clark calculated Mrs. Diffee’s monthly wage income
by using the earnings statement provided by petitioners. Her
earnings statement reported that she earned $12,673.92 for the
first 16 weeks of 2006. Officer Clark used this number to
calculate petitioners’ monthly wage income.
Second, Officer Clark adjusted petitioners’ housing and
utilities expense in accordance with the Internal Revenue
Service’s (Service) national standards. Under the national
standards, the maximum monthly housing and utilities allowance
for a family of two in Tulsa County, where petitioners reside, is
$932. Neither of these adjustments reflects an abuse of Officer
Clark’s discretion. See McDonough v. Commissioner, T.C. Memo.
2006-234 (no abuse of discretion by Appeals officer for using the
housing and utilities standard allowances rather than taxpayer’s
actual expense).
Third, Officer Clark did not abuse his discretion by
decreasing petitioners’ transportation expense. Officer Clark
considered petitioners’ monthly operating expenses for two
vehicles and petitioners’ monthly motorcycle payment.7
Fourth, Officer Clark did not abuse his discretion by
redetermining petitioners’ estimated tax expense. In his
calculation, Officer Clark included Federal and State income
7Petitioners did not have an outstanding loan on the Ford
Ranger.
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Last modified: November 10, 2007