- 10 - expenses, and she is working three jobs and “still not making it.” The IRS will take into consideration whether the requesting spouse will suffer economic hardship if relief is not granted. Rev. Proc. 2003-61, sec. 4.03(2)(a)(ii), 2003-2 C.B. at 298. Generally, economic hardship exists if collection of the tax liability will cause the taxpayer to be unable to pay reasonable basic living expenses. Butner v. Commissioner, supra. In determining a reasonable amount for basic living expenses, the Court considers, among other things: (1) The taxpayer’s age, employment status and history, ability to earn, and number of dependents; (2) an amount reasonably necessary for food, clothing, housing, medical expenses, transportation, current tax payments, and expenses necessary to the taxpayer’s production of income; (3) the cost of living in the taxpayer’s geographic area; (4) the amount of property available to satisfy the taxpayer’s expenses; (5) any extraordinary circumstances; i.e., special education expenses, a medical catastrophe, or a natural disaster; and (6) any other factor bearing on economic hardship. See sec. 301.6343-1(b)(4)(ii), Proced. & Admin. Regs. Petitioner must prove that the expenses qualify and that they are reasonable. See Monsour v. Commissioner, T.C. Memo. 2004-190.Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 NextLast modified: March 27, 2008