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the likelihood of increased housing and medical costs as
petitioner and Mrs. Johnson aged.
In the remaining three letters, petitioner alleged that he
was a victim of Hoyt’s fraud and asserted various arguments
regarding the appropriateness of an offer-in-compromise.
On September 29, 2004, respondent issued petitioner a notice
of determination. In evaluating petitioner’s offer-in-
compromise, respondent made the following changes to the values
of assets reported by petitioner on the Form 433-A: (1)
Determined that the house was worth $250,000 instead of $81,325;
(2) determined that the pasture land was worth $52,651 instead of
$26,325; (3) included the full value of petitioner’s and Mrs.
Johnson’s retirement accounts instead of their 70-percent value;
and (4) included the quick-sale value of the vehicles and the
motor home. Respondent determined that petitioner had total net
realizable equity in assets of $428,066.
Respondent accepted petitioner’s pension and interest income
as reported but increased the net rental income from $155 to $165
based on petitioner’s 2003 Federal income tax return. Respondent
accepted the majority of petitioner’s monthly expenses, but made
the following changes: (1) Reduced the foods, clothing, etc.
expense from $904 to $801 to reflect the national standard; (2)
reduced the housing expense from $1,254 to $885 to reflect actual
documented costs; and (3) disallowed the taxes expense because
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