- 17 -
Murphy v. Commissioner, 125 T.C. 301, 309, 320 n.10 (2005), affd.
469 F.3d 27 (1st Cir. 2006); Barnes v. Commissioner, T.C. Memo.
2006-150.
A. Economic Hardship
Petitioner asserts that Ms. Cochran abused her discretion by
rejecting his offer-in-compromise because “There is no indication
that SO Cochran gave any substantive consideration to
Petitioner’s demonstrated special circumstances or that he would
experience a hardship if required to make a full-payment.” In
support of this assertion, petitioner argues: (1) Ms. Cochran
failed to discuss petitioner’s special circumstances in the
notice of determination; (2) Ms. Cochran failed to consider that
petitioner’s expenses are currently greater than his income and
that those expenses will likely increase; and (3) Ms. Cochran
improperly valued petitioner’s house.
Section 301.6343-1(b)(4)(i), Proced. & Admin. Regs., states
that economic hardship occurs when a taxpayer is “unable to pay
his or her reasonable basic living expenses.” Section 301.7122-
1(c)(3), Proced. & Admin. Regs., sets forth factors to consider
in evaluating whether collection of a tax liability would cause
economic hardship, as well as some examples. One of the examples
involves a taxpayer who provides full-time care to a dependent
child with a serious long-term illness. A second example
involves a taxpayer who would lack adequate means to pay his
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011