- 13 -
(CCH), exh. 5.15.1-3 at 17,668, exh. 5.15.1-8 at 17,686, exh.
5.15.1-9 at 17,742. Application of the standard allowances for
housing and utility expenses (rather than the taxpayer’s actual
expenses) is not an abuse of discretion where use of the standard
allowances does not result in the taxpayer’s not having adequate
means to provide for basic living expenses. See McDonough v.
Commissioner, T.C. Memo. 2006-234.
The foregoing formulaic approach is disregarded, however,
upon a showing by the taxpayer of special circumstances that may
cause an offer to be accepted notwithstanding that it is for less
than the taxpayer’s reasonable collection potential (e.g., the
taxpayer is incapable of earning a living because of a long-term
illness, and it is reasonably foreseeable that the taxpayer’s
financial resources will be exhausted providing for care and
support during the course of the condition). Sec. 301.7122-
1(b)(3), (c)(3), Proced. & Admin. Regs.; 1 Administration,
Internal Revenue Manual (CCH), sec. 5.8.11.2.1 at 16,375, sec.
5.8.11.2.2 at 16,377. Petitioner does not allege, and it does
not appear, that any such special circumstances are present.
According to petitioner, respondent did not properly apply
the published guidelines because he failed to make an allowance
for petitioner’s basic living expenses which were greater than
that indicated in the published guidelines. Petitioner contends
that a greater amount should have been allowed to reflect the
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