I am preparing an Offer for clients (married couple) who show reasonable collection potential on the completed 433-OIC because they have equity in their home and the wife has a small IRA. Due to caregiving demands, and reduced earning potential because of the wife’s chronic health disabilities, I would like to argue that the equity in their home and the value of the wife’s IRA (their sole retirement asset) should be excluded from the RCP calculation. I have never filed an Offer citing Effective Tax Administration, and am hoping for some pointers on whether to argue this position, and how to argue this position. I an basing my assertion on the fact that, having just been granted a Chapter 7 discharge, they can’t refinance, won’t pass a credit check if they have to rent a home, and that, as they are only a few years away from retirement with limited earning potential, if the IRA is liquidated it leaves them with nothing but Social Security. Their SS benefits will combine to place them at 284% of the Federal poverty line.
Any feedback/suggestions/experience would be greatly appreciated!
The best approach in my experience is to make the economic argument as to why they need the equity and the IRA: usually its that they cannot cover their allowable expenses and based on life expectancy, they need that money to support themselves.
I would watch the program we did on ETA and DCSC offers in the collections area. I walked through actual cases we had in the office to illustrate this.
I got one accepted a couple of months ago. on the 433 I showed the equity in the home. In a cover letter I explained that the wife is battling cancer, they are living off of SS and their kids are helping them with the monthly bills and that they can’t afford to pay a loan on the house or pay rent. Offer Examiner just wanted a turn down letter from a lender for a home equity loan. She knew they wouldn’t get it but she covered her bases by documenting it. Offer was accepted for $1.00.