An expense subtracted from adjusted gross income when calculating taxable income, such as for state and local taxes paid, charitable gifts, and certain types of interest payments or business expenses.
Failure to repay an outstanding debt as agreed.
Money used for paying something other than tax debt. If an individual owes back taxes and is asking for debt relief, the IRS will look for dissipated assets. The IRS may say that the dissipated assets should have been used to pay down tax debt and refuse to settle for less than the amount of the dissipated asset or refuse to negotiate all together.
Discharge of Federal Lien
Authorized under the IRS Code. The process whereby the taxpayer or interested third party applies to have the federal tax lien removed from a specific piece of property or other asset. The discharge may be granted if:
- IRS has no interest in the property,
- IRS will receive the net proceeds from the sale of the asset, or
- The taxpayer has equity in other assets equal to 3 times the amount of the tax liability.