HOW MUCH SHOULD YOU OFFER FOR YOUR OFFER IN COMPROMISE?

The best way to settle a past due tax liability often is to make an "offer" through an OFFER IN COMPROMISE. Most often, the tax liability is settled for pennies on the dollar. But how much should you offer?

The Revenue Service has standards for a minimum acceptable offer amount. If the offer amount is less than this minimum amount, the OFFER IN COMPROMISE will be rejected.

Here Is The Answer.

The minimum acceptable offer amount is the total of all your assets less your liabilities that have priority over the Revenue Service (ie. car loans, mortgages, other secured creditors).

All taxpayers have an exemption amount for furniture, fixtures, and personal assets up to $6,250.

To illustrate, let's say you have a home worth $250,000 with a mortgage of $248,000, a car worth $30,000 with a car loan balance of $31,000, furniture and household goods worth $6,000, and credit

CAN THE REVENUE
SERVICE SEIZE YOUR HOME FOR UNPAID TAXES?

Prior to the IRS Restructuring and Reform Act of 1998 President Clinton signed into law on July 22, 1998, the Revenue Service could seize a taxpayer's home and sell it to pay for back taxes upon approval of the IRS District Director or Assist. District Director. Recipients of this newsletter either live in the Los Angles District or the Southern California District (Orange County).

Effective July 22, 1998, the IRS may not seize a taxpayer's principal residence without the written consent of a U.S. District Court Judge or Magistrate. This should substantially reduce the number of principal residence seizures.

Effective January 18, 1999, any taxpayer can effectively stop the IRS from seizing any asset by electing to have a hearing within 30 days after an IRS notice (by certified or registered mail) is mailed notifying the taxpayer it intends to levy property. So if the IRS plans on seizing your home be sure to timely request a hearing.

These rules do not apply if the IRS correctly determines the collection of tax is in "jeopardy" (taxpayer plans to destroy or fraudulently transfer the asset to evade lawful collection).