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!
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 only be provided after consultation by an attorney licensed in your jurisdiction. The answer to question does not create an attorney-client relationship or otherwise require further consultation. Mrs. Cook is licensed to practice law throughout the state of California with offices in San Diego County. She is authorized to handle IRS matters throughout the United States, and is also licensed to practice before the United States Tax Court. IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the IRS, please be advised that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used or relied upon, and cannot be used or relied upon, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
"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 Specialization PATENTAX.COM This communication is general information and not legal advice, and does not create an attorney-client relationship. This communication should not be relied upon as any type of legal advice. Please note that no attorney-client relationship exists between the sender and the recipient of this message in the absence of either (1) a signed fee contract and (2) remission of an agreed-upon retainer. Absent such an agreement and retainer, I am not engaged by you as an attorney, nor is any other member of my law firm.