Asset Values in an Offer in Compromise
May 4, 2015 by
The IRS Offer in Compromise (OIC) is a great tool to resolve your back tax liabilities, if you qualify. The IRS looks heavily at your assets and your ability to pay monthly.
If the equity in your assets is more than you owe the IRS, you may not qualify for the OIC. But the OIC equity calculation isn't as simple as taking the fair market value of your asset and subtracting the loan balance. It can be much more in depth than that. For example, the IRS uses a Quick Sale Value (QSV) or liquidation value to determine equity in assets such as your home or car.
If your home is worth $200,000 and you owe $100,000 on the mortgage, the IRS will value the equity at $60,000.
If you own one vehicle with a Kelly Blue Book Private Sale value of $5,000 and you have no loan balance on it, the IRS will value your vehicle's equity at $550.
The IRS Offer in Compromise is not as straight forward as we'd like it to be. It is definitely not as simple as a handshake deal, as some tax resolution companies make it out to be. And, not everyone qualifies for it. But, it isn't too difficult for most people to request the Offer in Compromise on their own. Call us at 866-937-5079 to find out how we can help determine if you qualify for the OIC.