How do you determine if the taxpayer can full-pay if they have multiple Collection Statute Expiration Dates (“CSED’s”)?

You calculate each year\’s CSED individually. Once you have the year, the balance due, and the CSED calculated, you apply the net equity in assets and pay off as many of the years as possible, oldest assessed year first, and then start making monthly payments of the future income. If the taxpayer manages to full-pay the liability before any CSED expires they can full-pay and is not eligible for an Offer-in-Compromise. If, however, there is at least one year where the CSED will expire before being paid in full, then the taxpayer cannot full-pay and is eligible for an Offer-in-Compromise.
Practitioners should consider if they made voluntary payments before filing the Offer, meaning they used the assets to pay down the more recent years with the longer CSEDs. If so, they might be able to set the client up for an Offer because the future income might not be able to pay the oldest years off before the CSED expires. Practitioners should do the analysis and determine the best strategy.