I will take a swing.
1. I am not sure why IRS will look at income for past 3 years, 433 doesn’t ask anything about income for past 3 years. 433 OIC does say if employed in business you can use a 6-12 month average. Eric has mentioned submitting information for the past 3 months. So, list her present income, submitting 3 months of bank statements. I would want to submit her present low income so she could stay in CNC.
2. I don’t think I would want her to have any more income than necessary, keeping her in CNC. Eric has mentioned income expense allocation if sharing a living space with non liable tax person. Of course you would have to run the figures both ways, rent from co tenant vs allocation of income.
3. I think my end game would be to keep her in CNC as long as possible, to see if 3 years from when tax return was due (assuming no late filing). If IRS comes after before 3 years are up because of change of her circumstance, then OIC is in the bullpen. IF more than 3 years has expired, then you have 2 options, OIC or bankruptcy.