My client owes about $75K for 2010 tax, and we're looking into installment agreement with IRS, and completing Form 433 to do so.
He has negative equity in his home, and monthly mortgage and property tax payments exceed the standard amount laid out in IRS tables by about $500/ month. Can he use actual amount of mortgage and property tax as long as the amounts are verifiable. or is he stuck with the amount laid out in the IRS tables?
Also, do credit card payments (he worked out a payment plan with unsecured creditors) not factor into calculation of disposable income? The figures called for in calculating disposable income on Form 433 seem to allow only for payments on secured debt, even though my client is pretty strapped after making the minimum payments called for in his payment plan for credit cards.
Finally, the tax liability was created largely due to a first year K-1 from a partnership showing $270,000 income to my client. Only $70,000 was actually distributed (used by my client to pay down debt). We're currently looking into whether a large loss might be reported on the K-1 for year 2011, and, if so could carry some of this back as net operating loss to year 2010 and reduce the 2010 liability. Does IRS consider waiting to see whether a net operating loss carryback will impact a tax liability in this kind of situation? Thus far my clients only received a couple of letters from IRS asking for payment, and sent a very small payment in response to each letter.
Thanks very much for any thoughts or comments