My Accounting Today article on the continuing trials and tribulations of Wesley Snipes and the IRS. Wesley Snipes and his counsel missed a very important element of the offer in compromise program: the dissipated asset rule. The moral of the story: you can shed your assets and then try to not put them in the offer amount as part of an OIC. OIC offer amounts is your “reasonable collection potential” – the formula is your net equity in assets (including any assets dissipated three years prior to the OIC application) plus amount that would be paid if you were to have an installment agreement with the IRS. As you can expect, the OIC went south after the IRS asked about the dissipated assets.
