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(but not conclusive of) a determination that collection would
cause economic hardship include, but are not limited to:
(A) Taxpayer is incapable of earning a living
because of a long term illness, medical condition, or
disability, and it is reasonably foreseeable that
taxpayer’s financial resources will be exhausted
providing for care and support during the course of the
condition;
(B) Although taxpayer has certain monthly income,
that income is exhausted each month in providing for
the care of dependents with no other means of support;
and
(C) Although taxpayer has certain assets, the
taxpayer is unable to borrow against the equity in
those assets and liquidation of those assets to pay
outstanding tax liabilities would render the taxpayer
unable to meet basic living expenses.
Sec. 301.7122-1(c)(3)(i), Proced. & Admin. Regs.
Petitioners contend that Mr. O’Connor’s injuries rendered
him permanently disabled. Although Mrs. O’Connor is able to
work, petitioners contend any income she earned likely would be
offset by the cost of childcare for their daughter. Petitioners
therefore assert that the rent from the building is their only
source of income.
Mr. O’Connor testified that he had attempted to borrow
against the equity in petitioners’ properties but was unable to
do so. Mr. O’Connor believes lenders view him as a credit risk
because of his inability to work. Selling the building to pay
the tax liabilities, he believes, would prevent petitioners from
meeting necessary living expenses.
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Last modified: May 25, 2011