Legal Question in Tax Law in Ohio

Re: offer in compromise

A primary residence is considered an asset by the IRS on their financial statements. To arrive at the IRS's interest in the house, take the fair market value of the house, reduce it by 20%, then subtract the balances due on any mortgages.

401k funds are also considered an asset, but there are many different rules as to the extent any value is available to the IRS. Generally speaking, if you can get to it, so can the IRS although a close review is necessary for a more specific answer. Subtract any taxes that would be due if the money was withdrawn.

Minimum credit card payments are usually always not allowed as a monthly expense. Exceptions could include if the payments are for card charges for business purposes, but the IRS generally will not allow unsecured debt as an expense in determining ability to pay.

401k loan repayments will not be allowed unless the funds were used for an otherwise allowable expense.