Offer in Compromise Non-liable Parties

Correctly handled, the offer in compromise non-liable parties is a useful tool for working out a settlement you can live with for settling your tax debt with the IRS. 

The key is knowing how handle this correctly the first time.  It’s a task for skilled professionals only. 

Mishandling this will invite the IRS to start levying your paycheck and bank accounts and seizing property. 

To handle this successfully, contact us now. 
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Non-Liable Parties – Understand How The IRS Perceives Your Situation

When filing an offer in compromise, the taxpayer must compute the offer amount. This is the total amount for which you expect the IRS to settle. This calculation is made up of equity in assets, plus a multiple of income less allowable expenses. The allowable expenses include amounts for household costs. When other people live in the household, their income will be considered in determining the offer amount.

Income & Expense of Non-Liable Parties

The household expenses will be prorated based on the percentage of income the taxpayer earns to the total household income. They even have a form to calculate this. It is necessary to provide the income and expense information of your other household members, regardless if they are liable or non-liable parties.

It is critical that the income and expenses are determined and prorated properly, before filing an offer. If done without this “proration”, you may be very disappointed when your offer is rejected or given back with a suggestion to substantially raise the offer amount.

As always, please hire a licensed CPA firm or law firm for any IRS issues, especially one as critical as an offer in compromise.

If you are considering hiring us, call Joe Mastriano, CPA 713-774-4467.
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