Can the taxpayer challenge the IRS expense standards as being abusive because they are so limiting?

No. The Internal Revenue Code states that the Secretary of the Treasury may compromise a tax debt and they have also authorized the secretary to create standards to evaluate the taxpayer\’s situation to determine what amount to compromise. Given that Congress directly delegated the authority to create these standards to the IRS, the standards that the IRS creates are given the effect and force of law as if Congress had made them.
However, taxpayers do have options to raise concerns where the standards are causing issues, and there are special circumstances the IRS should consider. The Offer program does allow for special circumstances to be raised when the Offer is filed and we can request the IRS to depart from its normal expense standards.