This exhibit shows a case scenario example. Type of Business: Widget Maker Type of Entity: Corporation Amount of Liability: $200,000 Number of Quarters Delinquent: 4 Years Remaining on Statute: 8 Status/Priority of NFTL: Filed; junior to first lienholder Is Business Current on Deposits? Now current on deposits Number of Employees: 25 Ability to Pay: Analysis of CIS shows ability to pay $5,000 per month, TP agrees with IA amount and has requested an installment agreement Will Payment Amount Full Pay Within Statute? Yes Status of Trust Fund: 433A shows no monthly ability to pay; officer is borrowing full equity of $25,000 on property he owns personally; TFRP investigation completed and TFRP waiver secured through length of proposed installment agreement plus one year Levy Sources: Bank Account Accounts Receivable Assets: 10 Trucks Office Furniture, Computers Fair Market Value: $50,000 each $4,000 Encumbrances: $250,000 $0 Additional Facts of Case: Taxpayer had previous liabilities that have all been satisfied. The vehicles were all purchased at the same time and the encumbrance was established when the vehicles were purchased. Taxpayer has been denied a loan at three banks. Estimated expenses of sale for towing, storage, advertising, etc. are $3,000. Recommended Course of Action: The revenue officer should complete an equity analysis and ; using 60 % of FMV, the RFSV of the vehicles is $50,000; with estimated expenses of $3,000, the expected minimum net sale proceeds would be $47,000. The revenue officer then conducts a risk analysis — the alternative collection method would be an installment agreement. The taxpayer is a "will pay/can't pay" taxpayer because the corporation is in compliance with Federal Tax Deposits and has requested and qualifies for an installment agreement. Since the government would be at no greater risk by granting the installment agreement, the taxpayer should be given the installment agreement. The tax lien will protect the government's interest in the asset if the taxpayer later defaults and seizure action is required.