OFFERS BASED UPON DOUBT AS TO COLLECTIBILITY

ASSET VALUE

  • Quick Sale Value (80% of the actual value)
  • Take value x 80% and deduct secured liens.

EXEMTIONS:

  • $6,250 for personal effects.
  • $3,125 for tools of the trade.

PENSION PLANS

  • If taxpayer cannot touch now; then not an asset to IRS
  • If taxpayer CAN touch (401(k); IRA), then full value IS an asset.

EXCEPTION:

If taxpayer intends to use the pension plan to fund OFFER

  • In that case, deduct the penalties and taxes that will need to be paid from the value of the asset.
  • IT IS MOST COMMON TO USE A WITHDRAWAL FROM A PENSION PLAN TO FUND THE OFFER.

EXCESS INCOME

    • IRS will require that the taxpayer pays an amount from excess income.
    • 48 months’ worth if cash offer;
    • 60 months with If a short-term deferred offer payable over 24 months.

Comments are closed.