Donald Ertz - Page 12

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               Respondent accepted the gross monthly income and expenses              
          petitioner reported on the Form 433-A, but with one exception.              
          Respondent reduced the housing and utilities expense to $1,102,             
          resulting in total monthly expenses of $4,004 instead of $4,156.            
          Because $4,004 exceeded petitioner’s gross monthly income of                
          $3,929, respondent determined that petitioner did not have future           
          disposable income that could fund an offer-in-compromise.                   
          However, respondent determined that petitioner’s mortgage would             
          be paid off in 4 years.  Petitioner’s monthly mortgage payment              
          was $795, and because his current monthly expenses exceeded his             
          income by $75, respondent determined that petitioner would have             
          $720 a month to fund the offer-in-compromise after the mortgage             
          was paid off.  Respondent concluded that over the remaining                 
          collection period there was an “amount collectible from retired             
          debt” of $51,120.  Regarding the possible future increase in                
          expenses outlined in petitioner’s letters, respondent determined            
          that these were “general projections from the taxpayers’                    
          representative and may never, in fact, be incurred” and thus did            
          not take these into account.  Respondent concluded that                     
          petitioner had the ability to pay $503,834 ($452,714 + $51,120).            
               Because petitioner had the ability to pay substantially more           
          than the $157,824 offered, respondent rejected petitioner’s                 
          offer-in-compromise based on doubt as to collectibility with                
          special circumstances.  Respondent also rejected petitioner’s               






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