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income Taxes 2,470 2,180
Rental income Court ordered 2,750 2,750
Pensions T/P pmts.
Child/dependent
care 0
Pensions spouse
Child support Life insurance
Alimony Secured debts
Other: Representation 250 0
IRA dstrbtn. Other:
Total income 7,963 Total expense 7,520 7,017
Net difference 946
Net difference times (a, b or c) = FIP [Future income potential]
Net difference = $946 x 60 $56,760
(a) If the taxpayer is making a cash offer (offering to pay
within 90 days or less) multiply the net difference by 48 or the
number of months remaining on the statute.
(b) If the taxpayer is making a short term deferred
payment offer (offering to pay within 2 years) multiply
the net difference by 60 or the number of months remaining
on the statute, whichever is shorter.
(c) If the taxpayer is making a deferred payment offer
(offering to pay over the life of the statute), use the
deferred payment chart to determine the number of months.
Petitioner points out that 2 Administration, Internal
Revenue Manual (CCH), section 5.15.1.10(3), at 17,662, allows as
a necessary expense accounting and legal fees if representation
before the IRS is needed or meets the necessary expense tests.
The costs must be related to solving the current controversy. In
calculating petitioner’s future income potential, the settlement
officer failed to allow monthly payments of $250 which petitioner
was making to his tax attorney in connection with the current
controversy. The corrected income potential would thus be
$41,760.
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Last modified: November 10, 2007