Can I purchase/lease a new car IF the IRS accepts my offer in compromise?

Asked over 1 year ago - La Mesa, CA

I have a $60,000 tax lien on my credit report from the IRS. I understand that if I could even find someone to finance my purchase of a new car that the IRS could seize that car. I have submitted an Offer in Compromise through my tax accountant. If the IRS accepts that offer, am I safe to buy a car without the fear of the IRS seizing it?

Attorney answers (4)

  1. Amanda Marie Cook

    Contributor Level 15

    5

    Lawyers agree

    Answered . You need to discuss all your financial plans with your tax accountant at least until your offer is accepted. When you submitted your offer, you were required to disclose a large amount of financial information and justify why your relatively low payment ought to be accepted. If you can afford to make a large purchase such as this after paying your offer, then the IRS is likely to figure that out, which is not a road you want to travel down.

    THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can... more
  2. Ronald J Cappuccio

    Pro

    Contributor Level 15

    5

    Lawyers agree

    Answered . Do not buy a car! If you need a new car, lease it. Do not put anything down and you will have no equity in the vehicle. Since you will not own the vehicle, and have no equity, the IRS has no asset to seize. On the other hand, you should check with your tax attorney to make sure that the expenditure for the new car will not interfere with the information you supplied to the IRS on your 433 A collection information statement.

    I hope this helps!

    Ron Cappuccio

  3. Patricia Beary

    Contributor Level 10

    5

    Lawyers agree

    Answered . Offers In Compromise can be tricky. In is generally not wise to make any changes to the financial information (Collection Information Statement) you submitted to IRS with your Offer In Compromise while the Offer is pending. While it may be that monthly payments on a new car would be the same as monthly payments on an existing car, I think that you should discuss your plans with your tax accountant and take no action until your Offer has been accepted. If there is no equity in the new car, there will be nothing for the IRS to seize. Based on my experience, it is more difficult to be approved by a lender for lease financing than for a purchase.

    Beary Law Offices PLC is not acting as your attorney in providing this response.
  4. Curtis Lamar Harrington Jr

    Contributor Level 20

    1

    Lawyer agrees

    Answered . "I have submitted an Offer in Compromise"

    1. You didn't state the value of the car. A $500 car would probably not be seized and if it were they will have a hard time selling it.

    2. Did your projections in the offer contemplate what your payments might be?

    3. It may be months and months before you hear back on the offer (which may cover all your outstanding years I hope).

    4. Close on the offer if you can, and THEN evaluate how much you have left over to see if you can afford it and to what extent you can afford it.

    5. Did you include a bankruptcy analysis with your offer? (identifying dischargeable years?) AND did you take note of the tolling effect of filing the offer?

    Good Luck with the offer.

    Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal... more

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