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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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If I have assets of 600K and I owe IRS 32K ( of which 18k ispenalties)

Customer Question

If I have assets of 600K and I owe IRS 32K ( of which 18k ispenalties) do I have any chance they would settle?
Submitted: 8 years ago.
Category: Tax
Expert:  Merlo replied 8 years ago.



In most cases, the IRS will not accept an Offer in Compromise to settle your tax debt for a lesser amount unless the amount offered by the taxpayer is equal to or greater than the reasonable collection potential (RCP). The RCP is how the IRS measures the taxpayer's ability to pay and includes the value that can be realized from the taxpayer's assets, such as real property, automobiles, bank accounts, and other property. The RCP also includes anticipated future income, less certain amounts allowed for basic living expenses.


So if you have assets worth $600,000 and a tax debt of $32,000, it is highly improbable that the IRS would accept such an offer. When an OIC is submitted, the IRS would conduct a full search on all of your assets and income sources, so they would be aware of your current financial situation.


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