Ch 13 & IRS offer in compromise

[secondtimer]

I added up the IRS standards applicable to me and it is pretty much equal to my gross income. On the IRS page it states ""Disclaimer: IRS Collection Financial Standards are intended for use in calculating repayment of delinquent taxes.""

Could I present this to them and qualify for an OIC if I use my cash reserves to fund the OIC?

Would TT consider this a preferential payment and if so would it be better to file first and use cash reserves to help fund the plan?

After the OIC "closes" I'll file 13 to remedy my non-priorty debt with a DMI around 100.00/month. One of the Att I sat down with said the plan payment here needs to be at least 50.00/mos.

My income is such that I'll be able to do 36 mos plan. 3600.00 is about half what i owe treasury and about equal to what I owe the state so I'll have my state tax debt to use as priority debt in my plan with nothing left for non-prority.

Opine please.

[HHM]

Keep in mind, an OIC takes both your DMI and the net equity in assets to determine the OIC amount. So any sort of "cash reserves" would go the OIC. For example, if you have a 401(k), the OIC will require you to liquidate it.
In a chapter 13, the cash reserves (baring some sort of exemption) would go into the plan anyway.

Since you have thrown around the term "priority," are the taxes you owe "priority tax debt" under the BK code? If not, then you do not need an OIC, just file the BK.

If the taxes are priority, you may consider doing an OIC. But if you have other debts coming after you, you might not have time. OIC's, conservatively take 8-14 months to get a determination. The IRS can take up to 24 months to "consider" an OIC. In general, satisfying an OIC would not normally be considered a preference in BK.

[secondtimer]

Thanks,
I'm trying to keep my house. If I can't get a modification I won't be able to pay the arrears in the plan along with priority tax debt (2009) not enough DMI to get confirmed. Besides, I think the trustee would go after the cash used for the OIC. I had no idea an OIC took so long. Do penalties and interest accrue during the process?

P.S. I've no assets to speak of.

[OHBOY]

....trying to follow and understand this thread......WHAT IS AN "OIC"?

[secondtimer]

http://www.irs.gov/businesses/small/article/0,,id=104593,00.html

[HHM]

Thanks,
I'm trying to keep my house. If I can't get a modification I won't be able to pay the arrears in the plan along with priority tax debt (2009) not enough DMI to get confirmed. Besides, I think the trustee would go after the cash used for the OIC. I had no idea an OIC took so long. Do penalties and interest accrue during the process?

P.S. I've no assets to speak of.

I don't think you have a preference issue. Even if you did, all you need to do is wait 91 days from the date you pay the IRS to file your BK. Preference relate to "similarly situated" creditors. The IRS debt is priority debt; unless you have other priority debt (unlikely) on par with the IRS debt that would not get paid, then there is no preference.

As for the house, you should probably step back, look at the situation objectively, is the house worth saving. If you NEED a modification to afford the mortgage, you should probably just bail on the house. IF the house is more than 10-20% upside down in value, you should just bail on the house.