How to fill the IRS Offer In Compromise with an underwater asset?
"You're supposed to be filling form 433-A. Vehicles are on line 18. You will fill there the current fair value of the car and the current balance on the loans. The last column is ""equity"", which in your case will indeed be a negative number. The ""value"" is what the car is worth. The ""equity"" is what the car is worth to you. IRS uses the ""equity"" value to calculate your solvency. Any time you fill a form to the IRS - read the instructions carefully, for each line and line. If in doubt - talk to a professional licensed in your state. I'm not a professional, and this is not a tax advice." If you have both consumer debt and IRS debt, you can file Chapter 7 bankruptcy to get rid of all of it. The trick is your taxes have to be at least 3 years old from the due date in order to be considered for bankruptcy. So newer taxes, like 2010 and on, can't be discharged yet (and earlier ones may not be yet, there are rules which toll the time) You'll definitely want to talk to a bankruptcy attorney in your area who focusing on discharge in tax debts. You may be able to kill two birds with one stone.  My other concern is are you current? Typically people routinely run up a new debt when trying to settle up on 9old debt. So the OIC route may be a waste of your time. Also, $6000 isn't a lot of money, so there's not a lot of room to negotiate down. It's all how you fill out the 656-OIC. I've seen way to many people not fill it out incorrectly.  The IRS has a limited amount of time to collect on a debt, so if there are old taxes, you may be better off getting into CNC status, which it seems like you would qualify for and let the debt expire on your own. That may be another viable solution. Unfortunately, this is really complicated to get the best result. And good tax debt attorneys fees start at the amount of taxes you owe! So that's not really cost effective to hire one.
"Advice from a long-time flipper You negotiate price based on four factors and none of these are set in stone: How much you love the house.  Is this house a 100 out of 100 for you or a 85 or a 75.  How much have you compromised. What is the likelihood that you will find a house that will make you just as happy or at least close.  You might have a house that is a 95 out of 100 but there are five other houses that you rated between 93-95.   What is your timeframe.  Know that playing hardball takes longer and can knock you out of the game sometimes and takes a little while to find a new game. What is the relative housing market.  Zillow and other such sites are crap.  Yes the give you a generalized feel for a community but their estimates are off sometimes by 30-40%.  Other factors like street/noise/updates to house/ and so on are huge factors.  You will have to really navigate the area and look for very comparable houses that have recently sold.  Then use average housing movements to extrapolate your future houses cost. As a buyer you have two jobs.  Buy the house you want and manage your agent.  Your agent wants you to buy a house as soon as possible and to increase their reputation.  Those are their only two factors of working.   By you offering closer to the asking price they are able to get their sales as quick as possible.  Also other agents will love working with them.  In fact your agent is selling you on the home and the price.  Agents hardly worry about you paying too much - as most buyers oversell the deal they get on their home.  Admitting that you paid too much for your house is more of an admission of ignorance of yourself, compared to agent incompetency. If you decide to low-ball the owner, your agent spends more time with you and possibly reduces their reputation with the selling agent.  So it is common for agents to tell you that you should not offer a low price as you will insult the owner. My advice.  Unless the home is truly one of a kind for the market offering anything within 20% of the asking price is DEFINITELY within range.  I have offered 40% less.  If a house is asking too much and has been on the market for 8 months there is no way I am going in with an offer of even 15% lower.  That leaves you no room.   What you do? First think about how much you think this house could sell for in the next 3 months.  In your example let's say 80K based on conservative comps.  Then take the most you would actually pay for it.  Let's say 75K.  70K is about as high of an opening offer I would go.   Do NOT tell your agent your true breaking points.  If you tell your agent that you would go to 75K on the house.  Then that is what their negotiations will start at.  Remember they want the sale to happen as soon as possible.  Very likely the other agent - especially if they know each other - will ask if how flexible you are going to be.  Then next thing you know your agent calls you back and says would you be willing to go 77K or the owner is firm at 80K. Do not give up your position.  You should never forecast to your agent what your next bid or offer would be for the house.  Never get into scenarios or future counters.   So you offer 70K.  If your agent asks you how firm that is?  ""Very firm"".  If your agent doesn't want to take the offer to them, ""Thank you for being my agent, but I am going to be working with someone that represents what I want.""   If the owner says ""You are done too me cheapskate.""  Well that's how it goes.  If the owner stays firm at asking or lowers - then you can come up if you feel comfortable doing so.  But understand what your goal is.  Is it to get a house or to get a good deal on a house?  Mine was always to get a good deal on a house.  So I might offer 72K next.  If they didn't budge, I am out.  If they moved down I went from there.   Easy Summary The fact is if they aren't willing to negotiate with you enough it always ends the same.  You give them your take-it-or-leave-it offer.  You tell your agent that if he/she comes back with one penny over it comes from their commission (god I have said this 100 times in my life and it is the best negotiation tactic you have with your agent).  The owner says yes or no and it is over." "Correcting Keith's answer (you should have read about these details in the terms and conditions of your bank/broker): Entrustment orders are like a ""soft"" limit order and meaningless without a validity (which is typically between 1 and 5 days). If you buy silver at an entrustment price above market price, say x when the market offer is m, then parts of your order will likely be filled at the market price.  For the remaining quantity there is now a limit, the bank/broker might fill your order over the next 5 days (or however long the validity is) at various prices, such that the overall average price does not exceed x. This is different to a limit order, as it allows the bank/broker to (partially) buy silver at higher prices than x as long as the overall averages is x or less.  In a limit set-up you might be (partially) filled at market prices first, but if the market moves above x the bank/broker will not fill any remaining quantities of your order, so you might end up (after a day or 5 days) with a partially filled order. Also note that an entrustment price below the market price and with a short enough validity behaves like a limit price. The 4th order type is sort of an opposite-side limit price: A stop-buy means buy when the market offer quote goes above a certain price, a stop-sell means sell when the market bid quote goes below a certain price. Paired with the entrusment principle, this might mean that you buy/sell on average above/below the price you give. I don't know how big your orders are or will be but always keep in mind that not all of your order might be filled immediately, a so-called partial fill.  This is particularly noteworthy when you're in a pro-rata market." "However this seems off because I would essentially be purposely   filling out a form incorrectly. Note that the only part of the W-4 form that is required to be filled out and given to the employer is the small certificate at the bottom that you tear off. In this part, it only asks you for ""Total number of allowances you are claiming"". You don't have to fill out any of the worksheets in the other parts of the form, which actually ask for specific information. Since there are different allowed ways of computing the ""Total number of allowances you are claiming"", I doubt that any number you put there can be said to be ""incorrect"". I think that the best to use the IRS Withholding Calculator. If you use it, the calculator will probably tell you to claim a few more exemptions. And you don't have to feel bad about ""filling the form incorrectly"" if you follow the IRS calculator." You're right to keep the oldest one.  That's an asset to your credit rating. Since you're already responsible with your credit, a dip in your credit rating doesn't really matter unless you're looking for another loan, like a mortgage. I personally like the cash-back rewards because they're the most flexible, so you have a good thing going with that card. Do those reward cards give you perks on all of your purchases?  If they do, then look carefully to see if you can do noticeably better with another card.  If not, it may not really be worth it. Regarding cancelling one of the cards, I wouldn't, and here's why.  Your cards can get compromised, and sometimes more than one gets compromised at the same time.  I was glad that I had three cards, because two of them got hit the same day.  Hence, having three cards hit on the same day is possible, and you'll be glad that you have the fourth. "I'll chime in here with the ""don't do it crowd."" I think it's fraught with ugly possibilities. However, you may, for various reasons, decide to say, ""to hell with it, we'll make it work."" If that is the case, treat it like a business transaction and not an emotional transaction. Work up a binding contract with your attorney for how the two of you will handle issues such as: Of absolutely critical importance is the bail-out clause: how will you handle it when one person says, ""Sayonara.""  None of this ensures a smooth road - god knows I wouldn't do it - but it could help protect your sanity and some of your investment down the road. Good luck." Basically you need to use a time-value-of-money equation to discount the cashflows back to today. The Wikipedia formula will likely work fine for you, then you just need to pick an effective interest rate to use in the calculation. Run each of your amounts and dates though the formula (there are various on-line calculators to pick from, and sum up the values. You did not mention your location or jurisdiction, but a useful proxy for the interest rate would be the average between the same duration mortgage rate and fixed-deposit rate at your bank; it should be close enough for your purposes - although if an actual lawsuit is involved and the sums high enough to have lawyers, it might be worth engaging an accountant as well to defend the veracity of both the calculation and the interest rates chosen. This is possible.  In fact in the cases of debt settlement the collection companies typically issue a 1099 for the difference on what is owed and what is settled, making that taxable income.  So the IRS sees it as income (in the US). However, this kind of dishonesty is not conducive to building long term wealth or wealth of significant means.    As others have said this is fraud, but provided that one is truthful on the loan application, it would be impossible to prove.  How can one prove that a person has no intention of paying a loan back? Doing this once or twice may ruin your ability to receive a loan for legitimate purposes for life. (I am making the assumption that this is a US based question). Keep in mind that the alternative is to amend your tax forms from 2010, and 2011. The IRS and the State will want their money, they might not to wait for 78 paychecks. That is 3 years.  Ask for lots of documentation, so you understand what they are doing.