The definition of a dissipated asset is one that should have gone to the IRS and instead went elsewhere – like paying off credit cards, etc. Here, money put down on a house when they owe to the IRS I believe would be considered dissipated. If it is it would be added back to the Offer amount the IRS wants – it is after all money it should have received. You would need to wait three years (three tax returns) to be filed before you could avoid the dissipated asset being added back. So if he wants he can buy the house, file for CNC and wait three years before looking at an Offer. Or go and clear up the IRS issue then he can focus on getting a house.