Legal Question in Tax Law in Oregon

Re: Income tax law

Sadly, the IRS can in fact sell your house, though typically this is done only as a last resort. For purposes of evaluating an offer in compromise, the IRS values most assets, including real estate, at "quick sale value," usually amounting to 80% of fair market value. To this, the IRS adds the amount you could afford to pay out of future income over the remaining life of the collection statute of limitations.

Any sale of the house would be subject to the IRS liens, unless the IRS agrees to discharge the property from the effect of the liens. The IRS will do this upon receipt of a properly prepared appliction, but only if the sale price is the property's full fair market value. Any inside deal, such as an effort to convey the property for only the amount of the debt if this is in fact less than the fair market value would be rejected.

More information on the approaches available to you, including the possibility of using bankruptcy to discharge the tax liabilties, can be found in the articles section of my website at www.bjhaynes.com.

I hope this is useful. If I can assist you further, please let me know.

BJ Haynes