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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.
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Last modified: March 27, 2008