How is an Offer in Compromise Evaluated by the IRS?
The IRS makes the Offer in Compromise available for taxpayers with debt. Youll see many advertisements sent to taxpayers to settle your debt with the IRS for pennies on the dollar. Well, there is a certain formula that we have to use for the Offer in Compromise. Its a straightforward formula and most States do not use this formula because congressional law does not reign theStatess in, as they do the IRS. The Offer in Compromise formula, simply stated, the way I like to describe it, is two sides of the same coin. On the one side you have equity in/and assets. That is, whatever equity you have, whether its liquid equity in a bank account or the current value of a life insurance policy or its equity in a home or an automobile, thats half of the taxpayer minimum offer to the IRS. The other half of the minimum offer to the IRS is if a taxpayer has any monthly disposable income. This amount of income is multiplied by forty-eight months because the IRS uses a four-year period of collectabili
