- Instructor: Attorney Bob Schaller
- Lectures: 18
- Quizzes: 1
Expense Component of RCP Formulas – Part 2.
This course focuses on Part 2 of the “allowable monthly expenses” component of the “Future Income” calculation for the RCP formulas. The allowable monthly expense analysis determines the “allowability” of a taxpayer’s monthly expenses. The prior course, Part 1, focused on additional “allowable monthly expenses” topics.
Use of the qualifying adjective “allowable” alerts a taxpayer that not all expenditures are included in the IRS’ definition of “allowable monthly expenses.” Certain expenses, like a vehicle loan payment on a taxpayer’s fourth car, would not be allowed by the IRS and the RCP’s “Future Income” component would not be reduced as a result of this vehicle loan expense. Therefore, the RCP would be calculated as if that vehicle loan expense did not exist.
RCP amount for Lump-Sum Payment Offer = “NRE of assets” + “Future Income LSPO.” “NRE of assets” = quick sale value (QSV) less amounts owed to secured lien holders with priority over the federal tax lien, if applicable, and applicable exemption amounts and other reductions. “Future Income LSPO” = [(gross monthly income – allowable monthly expenses) * 12].
RCP amount for Periodic Payment Offer = “NRE of assets” + “Future Income PPO.” “NRE of assets” = quick sale value (QSV) less amounts owed to secured lien holders with priority over the federal tax lien, if applicable, and applicable exemption amounts. “Future Income PPO” = [(gross monthly income – allowable monthly expenses) * 24].
Video Overview
Overview of Expense Calculation for RCP
Retired and Paid-Off Debt
Retirement and Profit-Sharing Plan Expenses
Life Insurance Expenses
Charitable Contribution Expenses
Tuition & Education Expenses
Student Loan Expenses
Child Support Expenses
Loans Incurred to Fund OIC Offer
Credit Card Expenses
Miscellaneous Expenses
Current Year Tax Expenses
Past Year State & Local Tax Expenses
Business Expenses
Closely Held Entities
Income-Producing Assets
Quiz
Reviews
Tax Law
This course focuses on the “allowable monthly expenses” component of the “Future Income” calculation for the RCP formulas. The allowable monthly expense analysis determines the “allowability” of a taxpayer’s monthly expenses.
