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Tax Law (Questions About Taxes)/Offer In Compromise
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Question
I am preparing an offer in compromise. The taxpayer owns approximately 7 parcels of real property, most of which are upside down(the mortgages are more than the fair market value.) In determining the Reasonable Collection Potential, do I disregard the upside down properties and just figure the remaining properties, or does the service view all of the properties as a whole (in which case the collective sum of the properties will be upside down)?
I thank you in advance for your answer.
They will look at each property individually. The lowest a property can be valued is zero.
That said, if all the properties were cross-pledged, an argument could be made to allow all the debt. But if each note is secured by a single property, the excess debt will not be allowed.
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Answers by Expert:
- Rod Dorothy
- Helen P. O`Planick, EA
- Carole Dunton
- Randall Brody, EA, MBA
- Mike Wellman
- Richard Fritzler
- Vanessa D. Powell, CPA
- MEdusa
- Glenn D Schnabel
- IJ Zemelman, EA MBA
- John L. Tidwell
- John Stancil, CPA
- Neil Johnson (The Tax DudeŽ)
- Adam Shay
- Edward L Parsons CPA
- Bruce W. Tyler, EA
- Chea Romine, CPA
- ABRAHAM ITANI, CPA
- WILLIAM D MCCONNAUGHY, CPA
- Jay Allen Finn, CPA
- Mark Trazo, CPA Candidate
- Randall Klein, MBA, EA
Mike Wellman
Expertise
I was a former Manager with Price Waterhouse, now PricewaterhouseCoopers, the largest accounting firm in the world. I have had clients in almost every industry and of every size. I will only answer questions dealing with IRS problems such as delinquent tax returns, Offers in Compromise (Tax Settlement), IRS collection matters including installment agreements, liens, levies, seizures, audits, appeals, innocent spouse claims and injured spouse claims. All other will be rejected as "outside my expertise". Visit http://www.irsos.com for information on IRS problems.
Experience
Over 25 years experience in taxation specializing in IRS collections, examinations and appeals.
Publications
New York Times, Wall Street Journal, Your Money.
Education/Credentials
BBA, Baylor University.
Awards and Honors
IRSOS.com won the Knowledgeweb award for educational excellence for content.
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