I have a client with a rejected multiple year offer in compromise. I the report I received from the revenue officer appears to overstate the number of months collectible when tolling events are considered. How are the number of months of future income determined for the total asset/net monthly income calculation?
How is the number of months determined for reasonable collection potential for an offer with multiple years
Keep in mind the IRS will sort the various years by the CSED (and not simply calendar). What I mean by that is, suppose you have years 2012, 2013, 2014, and 2015. The IRS would determine the CSED for each of these periods, and then place them in order to attempt to get full pay on all of them. In this example, the outcome could look something like this: Apply payments as follows- 2014, 2012, 2015, and then 2013.
Regarding CSED and tolling calculations, remember that in some cases, additional days are added to the CSED calculation, based upon the action taken (example: the period taxpayer is in bankruptcy PLUS 180 days or the pending OIC plus 30 days).