Advanced Handling Of OIC And Bankruptcy

  • A client with significant assets may receive better treatment in or OIC then in a bankruptcy.
  • IRS uses quick sale value (80%).

ADVANCED HANDLING OF OIC AND BANKRUPTCY

PENSION PLANS

IN AN OIC

  • A pension Plan with o present Right To Receive Funds Has NO VALUE!
  • An IRA, 401(k) or KEOGH Plan is Treated as Having the Value at the Time the Offer is Filed;
  • EXCEPTION If the taxpayer intends to use the funds toward the offer, then use value after deducting taxes and penalties.

BUSINESS OFFERS

  • Business OIC’s for ongoing businesses are difficult.
  • Particularly payroll taxes; IRS does not want to give one business an advantage over another.
  • Difficult at the offer specialist level; somewhat relaxed at the appeal level.

2 POLICIES WHEN SUBMITTING BUSINESS OIC’S

  • BUSINESS MUST BE CURRENT FOR 2 QUARTERS FOR PAYROLL TAXES;

AND

  • PRINCIPLES OF THE BUSINESS MUST BE CURRENT ON THEIR OBLIGATIONS TO FILE QUARTERLY ESTIMATES OR BE CURRENT ON THEIR WITHHOLDING.

DISSIPATED ASSETS

  • Assets liquidated shortly prior to an OIC where the proceeds did not go to the IRS.
  • EXAMPLE: Cashing in an IRA and using the money for other debts.

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