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What Are Dissipated Assets?

April 26, 2017assets dissipated

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What Are Dissipated Assets?

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Dissipated assets occur when funds are directed for a purpose other than paying off tax debt obligations. For example, a taxpayer who owes a tax debt uses monies from Home Equity Line of Credit to pay for home improvements. The IRS sees the HELOC funds for home improvement as dissipated assets. Thus, the IRS can refuse to settle and negotiate the tax debt in view that those funds should’ve been used to alleviate the existing IRS tax debt.