Stacy Lee Gonce - Page 9

                                        - 9 -                                         
               The third criterion under section 4.02 of Rev. Proc. 2003-61           
          is that the requesting spouse will suffer economic hardship if              
          relief is not granted.  Economic hardship for these purposes is             
          defined as the inability to pay reasonable basic living expenses            
          if the requesting spouse is held liable for the tax owed.  See              
          sec. 301.6343-1(b)(4), Proced. & Admin. Regs.  The ability to pay           
          reasonable basic living expenses is determined by considering the           
          following nonexclusive factors:  The taxpayer’s age; employment             
          status; ability to earn; number of dependents; expenses for food,           
          clothing, housing, and transportation; and any extraordinary                
          circumstances.  Id.                                                         
               The Appeals officer assigned to petitioner’s case computed             
          petitioner’s gross monthly income and living expenses and                   
          concluded that her income exceeded her expenses and that holding            
          her accountable for the tax owed would not result in economic               
          hardship.  The Appeals officer did not include petitioner’s                 
          health care costs in calculating her monthly expenses because               
          petitioner presented no evidence on this matter at her meeting              
          with the officer.  Petitioner presented at trial a log of out-of-           
          pocket medical expenses paid by petitioner in recent years.                 
          According to the log, petitioner incurred approximately $400 in             
          out-of-pocket medical expenses in 2006.  Petitioner testified at            
          trial that she earned gross wages of approximately $51,000 in               
          2006.  In the computation performed in February 2006, the Appeals           

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  Next 

Last modified: March 27, 2008