CTRS CTRS Offer in Compromise 3

Question 1

What is the 'Future Income' component of RCP for a periodic payment OIC?

Accepted Answer

Monthly disposable income multiplied by 24

Answer

Annual gross income multiplied by 5

Answer

Monthly net income multiplied by 12

Answer

Total projected earnings over the remaining CSED

Question 2

After an OIC is accepted, what is the taxpayer required to do for the next 5 years?

Accepted Answer

File all required tax returns and pay all taxes on time, or the offer may be defaulted

Answer

Submit annual financial statements to the IRS proving continued hardship

Answer

Make quarterly installment payments to the IRS regardless of offer terms

Answer

Refrain from any business activity that could generate new tax liabilities

Question 3

Which assets are generally excluded from the RCP calculation for OIC purposes?

Accepted Answer

Assets with no equity (fully encumbered by senior secured debt)

Answer

Retirement accounts regardless of balance

Answer

Primary residence regardless of equity

Answer

All vehicles regardless of value

Question 4

What is the IRS allowable expense system used when evaluating an OIC applicant's monthly disposable income?

Accepted Answer

National and local standards plus actual expenses for categories without a standard

Answer

Only actual documented expenses regardless of IRS standards

Answer

Only national standards with no local or actual expense consideration

Answer

The taxpayer's self-reported budget with no IRS adjustments

Question 5

Can the IRS make the acceptance of an OIC public record?

Accepted Answer

Yes, accepted OICs are generally available for public inspection under IRC §6103(k)(1)

Answer

No, all OIC acceptances are confidential under the taxpayer privacy rules

Answer

Only if the offer amount exceeds $1 million

Answer

Only for business entities, not individuals

Question 6

What is a 'processability review' in the OIC context?

Accepted Answer

The IRS's initial review to confirm the offer is complete, the required payment is included, and the taxpayer is in filing compliance before forwarding it for substantive review

Answer

A comprehensive financial audit of the taxpayer's assets and income

Answer

A review by the IRS Office of Appeals before a rejection is final

Answer

A state tax agency review of the federal OIC terms