IRS OFFER IN
COMPROMISE PROCESSABILITY - IRM
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5.8.3.1
(09-01-2005)
Overview
-
All offer receipts other than those based solely upon
Doubt as to Liability (DATL) are reviewed to determine if
they are processable. No fee is due on Doubt as to
Liability (DATL) offers, including Trust Fund Recovery
Penalty (TFRP). Processable offers are then
"built" (i.e. internal and external information
is secured to verify financial information), and
perfected, if necessary, before being assigned for
investigation. Not processable offers are returned to
taxpayers. This chapter defines the procedures to be
followed for determining jurisdictional responsibility,
processability, and case building.
5.8.3.2
(09-01-2005)
Routing Cases Based on Jurisdictional Responsibility
-
The following table provides guidance when it has been
determined that Collection does not have jurisdictional
responsibility:
5.8.3.3
(09-01-2005)
Combined Application Fee Payment Processing
-
Multiple offers submitted with one remittance intended
as the application fees for all will not be processed. Do
not load the cases to the Automated Offers in Compromise
(AOIC) system. Return the offers to the submitter (i.e.-
Power of Attorney not the individuals) with the Letter
3796.
5.8.3.4
(09-01-2005)
Processability
-
Centralized Offers in Compromise (COIC) Process
Examiners (PE) are responsible for determining
processability of all offers received and worked by the
Service, except those based solely on Doubt as to
Liability (DATL) issues. This determination must be made
within 14 calendar days of receipt of an offer in
compromise in the appropriate COIC site.
Each new receipt will fall into one of the following
categories:
5.8.3.4.1
(09-01-2005)
Determining Processability
-
An offer in compromise will be deemed not processable
if one or more of the following criteria are present:
-
Taxpayer Not in
Compliance — All tax returns for
which the taxpayer has a filing requirement must
be filed. This rule applies even if a Service
employee previously decided not to pursue the
filing of the return under the provisions of
Policy Statement P-5-133, because it was believed
to have "little or no tax due" .
In-business taxpayers must have timely deposited,
filed, and paid all required employment tax
returns for the two (2) preceding quarters prior
to filing the offer and must be current with
federal tax deposits for the quarter in which the
offer was submitted. An individual taxpayer should
not be considered an in-business taxpayer because
he owns or controls a corporation that is not in
compliance. IRM 5.8.7.6(5), Rejection, discusses
the criteria for possible rejection of an offer
from such an individual if a related entity is not
in compliance.
Note:
Generally speaking, IRM 5.1.11.1.3(2),
Delinquent Return Program, only requires
employees to conduct a compliance check to
confirm and document all IMF tax returns were
filed for the preceding 6-year period. The only
exception would be if fraud were discovered
during the course of the investigation. Even
then it should be extremely rare to go beyond 6
years.
IRM 5.1.11.4, Cases Requiring Special Handling,
discusses enforcement criteria, which states
that if the taxpayer refuses to file, neglects
to file, or indicates an inability to file, then
the employees should determine to what extent
enforcement should be used (e.g. summons,
6020(b), referral to Exam, or field, etc.).
Filing requirements will normally be enforced
for a 6-year period, which is calculated by
starting with the tax year that is currently due
and going back 6 years.
-
Taxpayer in Bankruptcy
— An offer will not be considered during a
bankruptcy proceeding. See IRM 5.8.10.2,
Bankruptcy.
Note:
IRM 25.17.4.7, Offers-in-Compromise and
Bankruptcy (09–01–2004) , states that
"administrative and legal problems would be
created if a tax liability was simultaneously
the subject of a court-supervised bankruptcy
case and the administrative offer-in-compromise
process." Therefore, it is the policy of
IRS that an offer will not be considered if a
taxpayer is in bankruptcy. Offer
materials including financial information should
be forwarded to the Insolvency unit assigned to
the bankruptcy.
-
Taxpayer did not submit
the application fee with the offer —
The application fee of $150 or the signed Form
656-A, Income Certification for Offer in
Compromise Application Fee, must be submitted with
each Form 656. No application fee is required for
offers filed solely on the basis of Doubt as to
Liability (DATL).
Note:
The Form 656-A applies only to individual
taxpayers.
-
No deviations from or additions to processability
criteria may be made without written authorization from
the Headquarters Office.
-
An offer cannot be returned for the sole reason that
the cost of an investigation may exceed the amount
offered.
5.8.3.4.2
(09-01-2005)
Determining Processability for Appeals Collection Due
Process Offers
-
Apply the same processability criteria as outlined in
IRM 5.8.3.4.1, Determining Processablity, but do not
load these offers on the Automated Offer in Compromise
(AOIC).
Note:
If Collection files a lien while an offer is being
investigated, and the taxpayer files a Collection Due
Process (CDP) request because of that lien and the CDP
remains open, the offer will become the jurisdiction
of Appeals. Collection cannot work any offer that has
an open CDP case. Appeals may require the assistance
to complete the investigation on complex cases. In
those cases, an Appeal Referral Investigation (ARI)
may be issued to the field.
-
Appeals will provide Centralized Offer in Compromise
(COIC) with both processable and not processable
determination letters containing all necessary
information, including the Appeals contact information.
It is the responsibility of COIC to sign, date, and mail
the applicable letter based on the processability
determination.
-
Offers submitted directly to the Compliance employee,
are occasionally identified as having an open Collection
Due Process (CDP) control. When this occurs, the
Centralized Offer in Compromise (COIC) site CDP
coordinator will research the Appeals Centralized
database System (ACDS) to determine:
If ACDS research indicates that there is an open CDP,
contact the assigned Appeals/Settlement Officer (AO/SO)
to determine the status of the CDP hearing.
Note:
If the CDP determination letter has not been issued
or a withdrawal has not been signed and dated, the
offer is considered to still be open and under the
jurisdiction of Appeals.
-
When an offer is received in conjunction with a CDP
and is deemed to be processable, the COIC site will
input the Transaction Code (TC) 480 on all tax periods
relating to the offer submission. This includes the
input of a TC 480 on all balance due periods not
specifically listed on the Form 656. It will be the
responsibility of Appeals to perfect the offer document.
COIC will advise the Appeals/Settlement Officer (AO/SO)
when it is necessary for the Appeals employee to secure
additional Form(s) 656 and/or application fee(s) prior
to investigation by generating the letter identifying
" Option Y" criteria. See IRM 5.8.3.7, Forms
656 Application Fee Requirements and Perfection, for
examples of these situations. The COIC site will prepare
the Form 3210, Document Transmittal, for transmittal of
the processable offer back to Appeals. The Form 3210
will include the following information:
Note:
It will be the responsibility of Appeals to resolve
each TC 480 (e.g., input of TC 481, 482, 483) after
Appeals concludes the offer investigation.
5.8.3.4.3
(09-01-2005)
Exception Processing for Offers in Compromise
Investigations Involving Taxpayers in Combat Zones
-
The following procedures are instructions on handling
those taxpayers identified as being located in a
"Combat Zone" (CZ) area. This determination
should be based on correspondence, case history entries,
or telephone contact. Relief provisions for extensions
of deadlines are provided to taxpayers located in the
designated CZ areas; such as, a contingency operation
designated by the Department of Defense (DOD), a
qualified hazardous duty area as defined by Congress, or
direct support of military operations in a combat zone
certified by the DOD. The relief provisions are also
applicable to any support personnel on official duty in
the CZ; such as, Merchant Marines serving aboard vessels
under the operational control of the DOD, Red Cross
personnel, accredited corespondents, and civilian
personnel acting under the direction of the U.S. Armed
Forces in support of those forces.
-
Offers that are received and deemed not processable
should be worked following standard procedures. If any
of the following situations exist, exception processing
should be followed:
-
Offers that are received and deemed processable;
-
Offers in which a Combo Letter was issued and
Combat Zone notification is received after the
letter was issued;
-
Offers in which a determination was made to
accept, return, or reject the offer; or
-
Offers in which a Return or Rejection Letter
was issued prior to the CZ notification.
-
In all of the situations identified in IRM
5.8.3.4.3(2) above, the following actions should be
taken:
-
Prepare the Form 3244, Payment Posting Voucher
, or Form 4844, Request for Terminal Action ,
requesting input of Transaction Code (TC) 500
Closing Code (CC) 56 on the taxpayers account. Use
the current date for the incoming call or the IRS
received date for the correspondence. The case
should be suspended for 120 calendar days without
taking any further action and should be reassigned
on the Automated Offers in Compromise (AOIC)
system to a designated or locally designated
assignment number. Management should utilize the
AOIC Follow-up Screen
to monitor the progress on the case until the TC
500 is reversed.
-
The offer investigation may continue if there
is a Power of Attorney or in the case of a joint
offer, the spouse is able and willing to provide
all substantiation.
-
The Service established an E-mail site at combatzone@irs.gov
, which can be used by military personnel,
support personnel, and their families to contact the
IRS.
5.8.3.5
(09-01-2005)
Processing Application Fees
-
The following situations assume that the taxpayer has
met the processability criteria for compliance and the
Form 656, Offer in Compromise, and Form 433-A, Collection
Information Statement for Wage Earners and Self-Employed
Individuals, and/or Form 433-B, Collection Information
Statement for Business , as appropriate, were submitted:
5.8.3.5.1
(09-01-2005)
Completing the Form 13479, COIC Application Fee Tracking
Report
-
Offers with remittances will be batched with the Form
13479, COIC Application Fee Tracking Report, for
processability determinations. Each separate remittance
will appear on its own line of the Form 13479. Offers
submitted with separate remittances for the application
fee and a deposit will have entries on two lines, while
an offer submitted with a single remittance that
combines the application fee and deposit will have only
one entry. Batch integrity must be maintained throughout
the processability determination.
-
Cases with deposits
and/or tax payments must have a
processability determination made and the
remittance deposited within 48 hours of the IRS
receipt date (unless "misdirected" ).
-
Those offers received with application
fees only must have a processability
determination made within 14 calendar days of the
IRS receipt date.
Upon assignment to the Process Examiner (PE), the
manager will ensure that the "PE Received
Date" and " PE COIC #" fields on the Form
13479 are accurately completed.
-
The last four (4) columns of the Form 13479 are used
to document the decision to process or return the
remittance. They are:
-
"Deposit 4710/3244 Amt."
-
"Application Fee Amt."
-
"Return Non-Negotiable"
-
"Return Negotiable"
-
Form 13479 should be completed as follows:
-
If the offer has one remittance for any combination
of the above three payments enter the appropriate
amounts in the respective columns and ensure the amounts
entered equal the "Check Amount" column.
-
If the offer is not processable take one of the
following actions based on the type of remittance
received:
-
Processability determinations must be made for all
offers listed on the Form 13479 before returning it to
Receipt and Control for processing of the remittances.
When all of the determinations have been made and the
Form 13479 is complete, send the original with all Forms
2515, 3244, letters, and envelopes to Receipt &
Control for processing of the checks. Acknowledgement of
the receipt of the Form 13479 must be secured from the
Receipt and Control/mail team employee by having them
place their initials in the upper right hand corner of
the Form 13479.
-
Personal checks will be stamped non-negotiable
and enclosed in the return offer package to the
taxpayer.
-
It is the responsibility of Receipt and Control
to return all " negotiable" remittances
back to the taxpayer in accordance with Receipt
and Control procedures.
5.8.3.6
(09-01-2005)
Dishonored Application Fee Payments
-
Accounting Branch will hand carry or fax copies of
dishonored application fee checks to the Centralized Offer
in Compromise (COIC) site that originated the Form 13479,
COIC Application Fee Tracking Report . Upon notification
of a dishonored application fee payment, the site will
determine the current Automated Offer in Compromise (AOIC)
offer assignment by querying the offer number annotated on
the upper left hand corner of the check. For Appeals
Collection Due Process offers, see IRM 5.8.3.6.1(3),
below.
Note:
Due to AOIC programming, only the assigned office can
gain access to the "Action Cd" field of the
"Application Fee" screen to input the
dishonored check status.
5.8.3.6.1
(09-01-2005)
Centralized Offer in Compromise Procedures
-
If the offer is still assigned to a Centralized Offer
in Compromise (COIC) site, COIC will immediately cease
processing the associated offer, update the Automated
Offer in Compromise (AOIC) "Application Fee"
screen by entering "I" in the " Action Cd"
field and return it to the taxpayer, utilizing letter
option "RET-AA" .
-
If the offer is assigned to an Area office, COIC will
telephone the employee assigned the offer (or the
manager of the assigned function, if no individual is
specified on AOIC) to advise of the dishonored payment.
Once contact is made with the assigned area office
employee or manager, COIC will fax a copy of the
dishonored check to include in the case file and
document AOIC to indicate the information was
communicated and to whom.
-
If the case was processed as an Appeals Collection
Due Process (CDP) offer, COIC should query the Appeals
Centralized Database System (ACDS) to determine which
Appeals employee is assigned the case. COIC will
telephone the Appeals employee to advise of the
dishonored check and fax a copy to include in the
Appeals case file. COIC will update the "Appeals
Fee Screen" application of AOIC by entering
"I" in the "Action Cd" field.
Note:
Appeals Collection due Process (CDP) cases can be
identified by the application fee number annotated on
the upper left corner of the check.
-
If notification of the dishonored check occurs after
the offer was closed on Automated Offer in Compromise
(AOIC), the designated AOIC liaison within the COIC
site, will contact the Headquarters AOIC analyst to
correct the application fee record of the closed offer.
5.8.3.6.2
(09-01-2005)
Area Office Procedures
-
Upon notification by the Centralized Offer in
Compromise (COIC) site of a dishonored fee payment, the
Offer Specialist (OS) (or manager of the assignment
function, if the offer is not assigned to an individual)
will immediately:
-
Cease processing of the associated offer.
-
Update the AOIC Application Fee screen by
entering "I" in the "Action Cd"
field
-
Return the offer to the taxpayer utilizing
letter option " RET-AA" .
5.8.3.6.3
(09-01-2005)
Notification of Dishonored Application Fee Check After
Issuance of the Rejection Letter
-
If notification of the dishonored OIC application fee
check occurred after issuance of a rejection letter, in
addition to procedures in IRM 5.8.3.6.1 and 5.8.3.6.2
above, the employee should:
-
Date the return letter 31 days from the date of
the rejection letter.
-
Include the open paragraph "RET-M"
with the following language: "As a result,
your request for appeal has been dismissed. "
Note:
This should only be used in those cases where
a request for an Appeal was received within the
30-day appeal period.
-
Close the case on AOIC as a return using the
mail date of the return letter and AOIC final
disposition code "10."
5.8.3.7
(09-01-2005)
Forms 656 Application Fee Requirements and Perfection
-
Treasury Regulations §300.3 requires taxpayers to
submit one fee for each Form 656, Offer in Compromise,
received, if no Form 656–A, Income Certification for
Offer in Compromise Application Fee, was submitted.
The table below is intended to assist in identifying a
processable offer for application fee purposes and provide
guidance to advise the taxpayer when more than one Form
656, application fee, and/or Form 656-A should be
submitted. In the following scenarios the status of the
taxpayer is not relevant (e.g. married, separated or
divorced). The general rule is that there should only be
as many Forms 656 as there are entities seeking to
compromise. The following scenarios assume all
processability criteria (other than for the application
fee) are met.
5.8.3.8
(09-01-2005)
Centralized Offers in Compromise Processability
Determinations
-
Centralized Offer in Compromise (COIC) sites determine
offer processability. To accomplish this Process Examiners
(PE) must take the following actions:
-
Check IDRS to determine if the taxpayer is
currently in compliance or is in bankruptcy.
• This includes checking all Social Security
Numbers (SSN), Employer Identification Numbers (EIN),
and Individual Taxpayer Identification Numbers (ITINs)
known or found for the taxpayer. At a minimum check
the following IDRS command codes: ENMOD, INOLES,
CFINK, BMFOLI, SUMRY, IMFOLI. If any data is found,
print and include it in the file. Also, research
IDRS command codes TXMOD and FFINQ for additional
data, but it is not necessary to include printed
copies in the file.
• Research the Master File to determine if the
taxpayer has any unfiled tax returns. Review the
offer package to determine if documentation
submitted by the taxpayer or another Service
employee indicates that the taxpayer has recently
filed or was not required to file any delinquent
returns. A delinquency check notification or
taxpayer delinquency investigation (TDI) does not
have to exist to determine if a taxpayer has unfiled
delinquent returns.
Note:
If a delinquent return was recently filed and
has not yet posted to IDRS, a copy of the return
is sufficient verification of compliance.
-
Check for any freeze codes such as: -Y, -W, -Z,
-A, -V, -L that may require special action. Refer to
local guidelines.
-
Verify that the taxpayer has submitted the
appropriate Form 656, Offer in Compromise, Form
433–A, Collection Information Statement for Wage
Earners and Self-Employed Individuals , and/or Form
433-B, Collection Information for Businesses.
-
Verify that the taxpayer has submitted the
application fee (or signed Form 656-A, Income
Certification for Offer in Compromise Application
Fee) for each offer submitted.
-
During the internal analysis, AOIC should be
documented of any findings.
-
Review Automated Offer in Compromise (AOIC) and the
history for any previous offers to determine if the offer
was submitted "solely to delay collection." See
IRM 5.8.3.19, Offers Submitted Solely to Delay Collection.
5.8.3.9
(09-01-2005)
Not Processable
-
When returning the offer as not processable, the return
letter will specify all reasons for the determination.
-
If the offer is not processable:
-
Stamp the Form 656 "RETURN" in red
(or circle the date in red if a red ink
stamp is not available) and write the date that the
offer was determined to be not processable.
-
Cross out all IRS received dates with a red"X."
-
Prepare the return letter with all applicable
reason code paragraphs.
-
In addition to identifying all of the reasons for
the determination, also address the issue of the
combined joint and separate liabilities, if
appropriate. For example, individual and corporate
or partnership liabilities on one Form 656. In those
cases, include Option "Y" in the return
letter.
-
Complete the Form 13479, COIC Application Fee
Tracking Report, if applicable.
-
Update the history specifying the reason(s) for
the not processable determination.
-
Do not sign the Form 656 as pending.
-
Update AOIC "Proc Cd" field to
"N" (not processable).
-
Managers and journey level Process Examiners (PE)
may sign and date the letter and close the case on
AOIC.
-
Send the Form 656, the Return letter, Publication
1 and Publication 594 to the taxpayer along with all
other documents originally sent. If a Power of
Attorney (POA) is present, send the representative a
copy of the letter. If disclosure issues exist, use
the appropriate paragraph to indicate this in the
return letter, and do not send a copy to the
representative.
-
If a Form 656 was forwarded by a Revenue Officer
(RO) and is not processable, the COIC site should
also forward the Form 657 and a copy of the "
not processable" letter to the approving
official of the Form 657.
-
Caution should be exercised to ensure that no IDRS
prints or other internally generated documents are sent to
either the taxpayer or the Power of Attorney (POA). All
internal documents should be destroyed. Nothing is
required to be maintained in local closed files on these
cases.
-
If the offer was originally determined processable and
the application fee was deposited, but it was later
concluded that this determination was made in error,
processing should stop. The case should be closed using
not processable procedures defined above. In these cases,
it is important to ensure the "N" (not
processable) is input on AOIC to reverse the Transaction
Code (TC) 480(s). This will result in the generation of a
TC 483 posting to the appropriate modules, and a refund of
the $150 application fee.
5.8.3.10
(09-01-2005)
Processable
-
An offer is considered pending when a delegated IRS
official signs and dates the Form 656, Offer in
Compromise, in the appropriate section. This date is the
official offer pending date.
Note:
The pending date entered on AOIC must match the date
the delegated official signed the Form 656. This date
must also match the Transaction Code (TC) 480 date when
it posts to IDRS.
-
If the offer is processable:
-
Sign and date the waiver on Form 656 (item 11).
-
Change the "Proc Cd" to a "Y"
(processable).
-
Complete the AOIC Application Fee Screen.
-
Complete the MFT and "Terms" screen on
AOIC.
Note:
If tax periods are in status 60, 61, or 53
(except for those status 53 modules with Closing
Code "03" [unable to locate] or Closing
Code "12" [unable to contact]) remove
the "Y" on each tax period on the MFT
screen. DO
NOT change the status of
those accounts, unless the taxpayer has defaulted
the installment agreement.
-
On all IMF cases enter "P" if the offer
is for the primary taxpayer or the controlling
taxpayer identification number (TIN) on the entity,
enter"S" if the offer is for the secondary
taxpayer , or enter "B" if both husband
and wife are making a joint offer.
Note:
If only one party of a joint liability is
submitting the offer, remove the "Y"
from the MFT screen. This will take the case out
of Status 71.
-
Communication with the taxpayer and/or authorized
representative may be necessary to perfect the offer while
it is pending. This communication may be completed by
letter or personal contact.
-
If an offer was submitted by an Revenue Officer (RO)
and it is processable, but the RO has determined that the
offer was submitted "solely to delay collection"
, the COIC site will contact the originating RO to advise
that the return letter has been issued. Unless a jeopardy
situation exists, the RO must wait for COIC notification
that the return letter has been issued before taking any
collection enforcement action. See IRM 5.8.3.19, Offers
Submitted Solely to Delay Collection, for delegated
approval authority.
-
COIC will request Transaction Code (TC) 480 and Status
71 through the AOIC system. However, there may be
situations when the Status 71 will not generate (e.g. MFT
31 modules created prior to January 2005, imminent
statute, etc.). In those cases, the field Offer Specialist
may request input of the TC 470 with Closing Code (CC) 90
to suspend collection activity.
5.8.3.10.1
(09-01-2005)
Erroneous Processability Determinations
-
The Service only collects the application fee for
processable offers; therefore, fees associated with
offers that are initially deemed processable but
subsequently determined to be not processable must be
returned to the taxpayer.
-
When an erroneous processability determination is
corrected prior to forwarding the related application
fee for deposit and it is still in the custody of
Receipt and Control or the mail team, the COIC sites
should follow campus procedures designed to include the
remittance in the not processable return letter and to
correct the AOIC fee screen record.
5.8.3.10.2
(09-01-2005)
"Application Fee Refund/Apply Listing"
Validation
-
When an erroneous processability determination is
corrected after forwarding the related application fee
remittance for deposit, the COIC sites will need to
determine whether the remittance has been deposited. An
" Application Fee Refund/Apply Listing" should
be generated from AOIC to identify application fees that
were initially determined to be processable, but later
determined to be not processable. Generation of this
listing is required in order for the COIC site to verify
and authorize a manual refund.
Note:
The COIC sites should request the Monitoring Offer
in Compromise (MOIC) function to generate the
"Application Fee Refund/Apply Listing" on a
monthly basis.
-
Generally, when an offer is deemed "not
processable" , the Service includes the taxpayers
remittance with the return disposition letter. However,
depending on the elapsed time between inputting a
processability change on AOIC from a "YES"
to a "NO" ,
the Service may have already deposited the related
application fee.
-
To determine whether or not manual refunds of the
application fee should be issued, research the completed
Form 13479, COIC Application Fee Tracking Report, for
those offers to determine whether the application fee
was deposited by the Service or returned to the
taxpayer.
Caution:
Thorough research and care is required when
determining which offers on the "Application Fee
Refund/Apply Listing" should receive manual
refunds.
-
To request the Monitoring OIC (MOIC) function to
issue manual refunds, the COIC sites must prepare a
memorandum that includes:
-
Records that support the COIC sites decision to
either remove the offer record from the
"Refund/Apply Listing" or to issue a manual
refund must be retained for one year. At a minimum, the
file should consist of:
-
Copies of the "Refund/Apply Listing"
.
-
Copies of the Form 13479, COIC Application Fee
Tracking Report.
-
Any other supporting documentation necessary to
support the decision; including, but not limited
to the Remittance Processing System daily
remittance register.
5.8.3.11
(09-01-2005)
Types of Perfection
-
Certain perfection errors must be corrected before
beginning the offer investigation. The combo letter on the
Automated Offer in Compromise (AOIC) system is designed to
communicate with the taxpayer and their representative to
request the necessary corrective action. If there is no
response to the request letter, return the offer to the
taxpayer as not perfected. A return for failure to perfect
an offer does not require a Form 1271, Rejection or
Withdrawal Memorandum. The taxpayer has no appeal rights
when the offer is closed as a return. The following errors
must be corrected before beginning the investigation:
-
The taxpayers name, physical
address or taxpayer identification number (TIN) is
missing or incorrect and
cannot be determined from IDRS or other
documents submitted with the offer.
-
The offered amount is blank or zero.
-
No tax liability has been assessed or pending and
the amount(s) can not be determined.
-
Insufficient number of Forms 656 and application
fees submitted.
-
When sending a combo letter to perfect the errors
listed in (1) above or to request financial
substantiation, also include a request to correct the
following errors.
Note:
If acceptance of the offer is considered and a combo
letter was not sent but the errors listed below exist,
they must be corrected prior to the recommendation to
accept the offer.
-
The offer was submitted on an obsolete Form 656.
-
The Form 656 is not a verbatim duplicate. Such
as, preprinted terms of the Form 656 are altered,
deleted or missing.
-
An amount of money is offered, but the payment
terms are not specified.
-
The taxpayer(s) signature is missing on Form 656.
-
Form 433–A and/or 433–B is incomplete.
-
The taxpayer has included a period(s) for which
no amount is due.
-
If a period with an amount due is missing from the Form
656, but all periods due can be determined from IDRS or
other documents submitted with the offer, add the missing
period(s) to the AOIC MFT screen. Do not add the missing
period(s) to the Form 656 unless contact is made with the
taxpayer.
When a taxpayer has included a period(s) for which there
is no apparent amount due, do not add the period(s) to
AOIC. Contact the taxpayer to determine if any issues are
pending that may result in additional tax. If there is no
tax due after contact with the taxpayer, document the
history and do not add the period(s).
Note:
Contact may be made by telephone or by sending the
AOIC combo letter requesting the inclusion of the
missing period(s) or the deletion of the no tax due
period(s) on the amended Form 656. If the taxpayer
agrees to the addition of the missing period(s) or the
deletion of the no tax due period(s), the history must
document the method of agreement by the taxpayer.
-
If the taxpayers name, physical
address, or TIN is missing or incorrect and the correct
information can be
located on IDRS or other documents submitted with the
offer, input the correct information on AOIC.
-
If the basis for compromise is not indicated, but it
can be determined by reviewing the package, begin the
investigation.
Note:
The offer cannot be accepted unless an amended Form
656 is signed, correcting all errors listed in (1) and
(2) above.
5.8.3.12
(09-01-2005)
Screen For Obvious Full Pay Processing
-
Taxpayers may submit an offer to compromise the
liabilities based on Doubt as to Collectibility (DATC),
yet indicate on their application an ability to pay the
account in full. These cases, once determined to be
processable, will be screened out. Absent
any special circumstances they will be rejected with no
further investigation or verification. The
taxpayer will be directed toward the appropriate
resolution for the delinquency. The rejection letter will
be the first communication with the taxpayer. A decision
to reject with appeals rights is adequately justified by
the taxpayers self-disclosed ability to pay in full.
-
For processable offers one of the first considerations
is to determine if the taxpayer can pay in full. The
following initial review should be conducted by the
Centralized Offer in Compromise (COIC) site on all
processable offers to make that determination.
-
Complete the Full Pay worksheet using the
taxpayers figures only, as reflected on the CIS.
-
Do not adjust any asset values or apply necessary
expense standards.
-
If the amount shown by the taxpayer on the CIS
reflect that the taxpayer can fully pay the tax due
via either liquidation of assets or on an
installment agreement, assign the offer to AOIC
designation "6900."
Note:
If special circumstances or Effective Tax
Administration (ETA) conditions are presented by
the taxpayer, assign the case to an Offer Examiner
(OE) for further evaluation and consideration.
5.8.3.13
(09-01-2005)
Centralized Offer in Compromise Case Building and
Perfection Procedures
-
For all processable offers not directly transferred to
an Area office or for those qualifying under the
"Screen for Obvious Full Pay " procedures, the
Collection Information Statement (CIS) should be reviewed
to verify the taxpayer has submitted all supporting
documents.
-
Prepare the combo letter using the paragraphs
that address the missing substantiation or
incomplete documents as well as any Form 656
perfection issues. Include Publications 1 and 594.
Document the AOIC history to summarize the required
substantiation submitted with the offer as well as
all perfection issues.
-
A copy of the signed and dated letter must be
retained in the file.
Note:
All combo letters will be postdated five (5)
calendar days. Schedule follow up for the 45th day
after the date of the letter. Thus, at least 50
calendar days (5 postdate plus 45 calendar days
from the date of the letter) would have elapsed
before following up.
-
Mail the letter to the taxpayer and
representative, if applicable. If a disclosure issue
exists, use the appropriate paragraph to indicate
this in the combo letter, and do not send a copy to
the representative.
-
Envelopes containing combo letters including
Options "B " , "C" , or
"D" must be stamped or otherwise marked
"URGENT - TIME SENSITIVE" and include
Notice 1326, Offer in Compromise (OIC) Applicant
ALERT.
-
Document the mailing date of the letter and a
follow up date on AOIC.
-
Assign the offer to AOIC designation
"5100" or "5300" , as identified
in IRM 5.8.3.10(3) above.
-
An analysis of the information provided on the
Collection Information Statement (CIS) or any other
documentation received should be made prior
to issuing a document request or combo letter.
Note:
The letter(s) should only
request information necessary to make a
reasonable collection decision.
-
The following information is considered to be necessary
to allow the Offer Examiner (OE) the ability to make a
determination. If the following expenses were claimed on
the CIS but substantiation was not included, supporting
documentation should be requested.
-
Income statements for the last three months (a
current year-to-date statement is acceptable as long
as it represents at least three months).
For those taxpayers on Social Security or a fixed
pension or retirement where the monthly income does
not fluctuate, it may only be necessary to secure
one monthly statement to verify the amount of
income. In those cases, verification of income may
be available through secured bank statements.
Note:
If applicable, substantiation for three months
of income statements for any not liable person
should also be requested in order to determine
taxpayers share of living expenses. See IRM
5.8.5.5.4, Shared Expenses, for additional
information on the treatment of shared expenses.
-
Bank statements for the last three months.
-
The current available cash value or loan value of
401(k), profit sharing or other retirement plans,
and the current balance due on any existing loans
against that plan. See IRM 5.8.5.3.8, Retirement or
Profit Sharing Plans, for more information on
valuing a Retirement or Profit Sharing plan.
-
Substantiation should also be requested for the
following information; however, if the taxpayer fails to
provide the supporting documentation, the expense should
be disallowed and a determination made based on all other
information. The following list is not all-inclusive. See
IRM5.8.3.16, Analyzing Taxpayer Responses to Combo Letter.
-
Health insurance and out of pocket cost for the
last three months (refer to LEM 5.3)
-
Current balance due on motor vehicle loans.
-
Court orders and proof of payment for the last
three months.
Note:
Court orders will only
be required if the payment is to be allowed in the
computation of the Reasonable Collection Potential
(RCP).
-
Current balance due on real estate mortgages
-
Child and dependent care for the last three
months.
-
Other secured debt statements for the last three
months.
-
Life insurance premiums for the last three
months.
5.8.3.14
(09-01-2005)
Centralized Offer in Compromise Internal Verification
Research
-
Prior to assigning the offer for investigation internal
sources must be searched.
-
Conduct research using IDRS, the electronic locator
source, state motor vehicle records, and in-house real
property valuation sources, to verify claimed amounts and
to identify undisclosed assets or sources of income.
-
Generally it will only be necessary to secure motor
vehicle valuations from a trade association guide on
vehicle(s) that are three years old or newer and have no
lien
Example:
When considering an offer in the year 2004, a 2001
model is considered to be three years old or newer
5.8.3.15
(09-01-2005)
Processing Taxpayer Responses to Combo Letters
-
Update the Automated Offer in Compromise (AOIC) history
to annotate the information and/or documents received and
sign any amended or revised Forms 656 with the current
date. Retain the original Form 656 and any amended Forms
656 in the file.
-
If the determination is made to return the offer for
failure to provide the requested information, use the
appropriate paragraph(s) in the AOIC return letter.
-
Retain the original Form 656, any amended Forms
656, and a copy of the return letter in the file.
-
Cross out all IRS received dates with a red"X"
. Stamp the Form 656 with "RETURN" , in red,
and add the current date.
-
Update the case history on AOIC including the
reason for the return. Include a copy of the history
in the file and give the file to the manager for
approval.
-
Process Examiners (PE) are required to initiate the
next appropriate action on cases where taxpayers have
responded to the combo letter within 10 calendar days from
the date the offer is assigned to the PE.
-
If the taxpayer or their representative requests an
extension of time to comply with the request for
information, a reasonable amount of time should be
granted. Document the Automated Offer in Compromise (AOIC)
history indicating the new deadline for the response. If
the taxpayer and/or their representative fails to meet the
additional deadline, initiate the procedures as defined in
IRM 5.8.3.17, "No Reply" Procedures .
5.8.3.16
(09-01-2005)
Analyzing Taxpayer Responses to Combo Letter
-
The failure to provide proof of payment of any
Collection Information Statement (CIS) claimed monthly
expense amounts for health care expenses, court
orders/court ordered payments, child/dependent care, life
insurance, other secured debt, other expenses, or the
failure to submit current loan balance statements for real
estate mortgages, or current loan balance statements for
motor vehicles will by itself
not be sufficient reason to return an offer.
-
If a court ordered payment is to be acknowledged as an
expense, a copy of the court order must be secured to
determine the number of months to allow for the remainder
of the payments. If the court ordered payment is not to be
allowed, a copy of the court order will not be required.
-
Process Examiner's (PE) will determine if the taxpayers
response or original submission statements and/or
documents addressed all requested items even when it may
not have specifically included the information sought by
the combo letter. The failure to provide the desired
information/documents will by
itself not be sufficient reason to return an
offer, as long as the taxpayer addressed the particular
information/document requested.
Note:
If the taxpayer has substantially replied to the
request, but has not provided all the information
requested, the case should be assigned to an Offer
Examiner (OE) for further review and evaluation on
whether a reasonable collection potential (RCP) can be
calculated. The OE should attempt one phone call to
secure the missing information before returning the
offer as a "No Reply"
Below are some examples of when a taxpayer may address,
while not actually providing the requested substantiation,
may include but are not limited to the following:
-
Bank statements are provided , but not all pages
were included or only two months were sent instead
of three.
-
Wage statements are provided, but not all pages
were included or only two months were sent instead
of three.
-
The taxpayer indicates an inability to provide a
particular requested document (e.g., court order or
judgment, annual statement of Social Security
annuity amount).
-
The taxpayer indicates that they did not
understand the request or that all requested
documentation is attached.
-
The taxpayer indicates that a non-liable person(s)
has no income or refuses to provide the
substantiation.
-
Offers for which the Process Examiner (PE) determined
the taxpayer has substantially replied and/or adequately
addressed the requested information and/or documents (even
if they did not specifically include them in the
response), or where they failed to substantiate certain
claimed monthly expenses or loan balances, will be
assigned to an Offer Examiner (OE) for further
consideration.
-
If the Offer Examiner (OE) determines that the RCP
calculation cannot be completed because of the missing
information and/or documents, the OE will attempt to
telephone the taxpayer (or representative, if applicable)
to secure any needed substantiation, explaining the
information is needed in order to conduct the offer
investigation. If unable to contact the taxpayer by
telephone after one
attempt or if the taxpayer/representative is unable to
provide the substantiation to the OE within five (5)
calendar days (fax transmission is preferable), document
the AOIC history and return the offer for failure to
provide necessary information.
-
If any of the necessary Form 656 perfection errors
identified in IRM 5.8.3.11(1) above were not corrected,
the offer will be returned. The following conditions
assume that the response corrected any perfection errors
on the Form 656.
5.8.3.17
(09-01-2005)
"No Reply" Procedures
-
After the offer is determined processable and the combo
letter has been sent, the offer should be held for the
required number of days to allow the taxpayer to provide
the requested information. If after the designated time
period has passed and the COIC site has not received a
response, an automated return process will be completed.
The AOIC system will generate all the necessary letters
and documents to close the case. Before closing the offer
the employee must check AOIC to verify that no response
was received.
Note:
Processable returns for "No Reply" will not
be made by the Process Examiner (PE) unless the taxpayer
did not submit any
requested documentation and the taxpayer did
not provide substantive information with the original
submission. Those cases where the PE determined that the
taxpayer substantially provided the information will be
assigned to an Offer Examiner for a determination
whether the response was sufficient to make a
determination or to return the offer.
-
Offers for which the Process Examiner (PE) determined
the taxpayer has substantially replied and/or adequately
addressed the requested information and/or documents (even
if they did not specifically include them in the
response), or where they failed to substantiate certain
claimed monthly expenses or loan balances, will be
assigned to an Offer Examiner (OE) for further
consideration. The PE will not implement the "No
Reply" procedures.
-
If the taxpayer or their representative requests an
extension of time to comply with the request for
information, a reasonable amount of time should be
granted. Document the Automated Offer in Compromise (AOIC)
history indicating the new deadline for the response. If
the taxpayer and/or their representative fails to meet the
additional deadline, initiate the "No Reply "
procedures as defined above.
5.8.3.18
(09-01-2005)
Withholding Collection
-
Installment agreements remain in effect while the offer
is pending.
-
For offers submitted after December 31, 1999,
collection by levy on property owned by the offer taxpayer
is prohibited while the offer is pending unless collection
is in jeopardy.
-
The term "jeopardy" has the same definition
described in IRM 5.11.3, Initial Processing of Effective
Tax Administration Offers, and Policy Statement P-4-88.
Collection is not considered to be in jeopardy because an
undisclosed asset was discovered during the investigation.
-
Upon receiving information that a jeopardy levy has
been approved, contact the employee issuing the levy and
if it is agreed that the offer was filed to hinder or
delay collection follow procedures in IRM 5.8.3.19, Offers
Submitted Solely to Delay Collection, below to return the
offer.
-
The prohibition on levy does not require release of a
levy that was served prior to the offer submission.
However, the taxpayers circumstances should be considered
when making a determination to release a levy or keep it
in place while the offer is pending.
-
The prohibition on levy while an offer is pending does
not extend to filing notices of federal tax lien. See IRM
5.8.4.9, Notice of Federal Tax Lien Filing, for a
discussion of filing notice of federal tax lien while an
offer is pending.
5.8.3.19
(09-01-2005)
Offers Submitted Solely to Delay Collection
-
When it is determined that an offer is submitted
"solely to delay collection" , the offer can be
returned to the taxpayer without further consideration.
Note:
The term "solely to delay collection "
means an offer that was submitted for the sole purpose
of avoiding or delaying collection activity. See IRM
5.8.3.19.1, Solely to Delay Collection Determinations,
below.
.
-
The Field OIC group manager and the Unit Manager at the
COIC site, have delegated authority to approve returns
based on "solely to delay collection" .
-
An offer is not considered submitted "solely to
delay collection" just because there is an imminent
CSED issue or if an offer has been investigated and
rejected and the taxpayer exercises appeal rights.
5.8.3.19.1
(09-01-2005)
Solely to Delay Collection Determinations
-
When a taxpayer resubmits an offer that is not"materially"
different from a previous offer that was considered and
either rejected with appeal rights or returned, the
offer may be returned as "solely to delay
collection" .
Example:
The taxpayer fails to address the issues or defects
of the previously submitted offer.
-
The offer may be considered as "materially"
different when:
-
The amount reflected on the re-submission is
substantially similar to, less than, or the same
as the prior offer and
the following exists:
1) The taxpayers financial situation has changed.
Note:
A change in the taxpayers financial situation
may include:
•A change in employment and/or income,
•A change in marital status effecting future
ability to pay or ownership of assets,
•The loss of an asset that was included in the
original offer investigation,
•A change in circumstances that would affect
allowable expenses and future ability to pay.
2) The taxpayer has raised special circumstances
that were not considered during the prior offer
investigation.
-
When the Service has accepted an offer in compromise
and the taxpayer subsequently defaults on the offer
agreement and then files a new offer within one year of
the default, the offer may be returned as "solely
to delay collection" unless the new offer indicates
any of the following:
-
Although no provisions are provided for any formal
appeal of a decision to return an offer submitted
"solely to delay collection" , all employees
must honor any taxpayers request to review this decision
with their immediate manager.
-
In some situations it may be determined that an offer
is submitted as "solely to delay collection"
when no prior offer has been submitted. When a
collection employee has determined that the next action
necessary is to enforce collection through levy or
seizure, but the taxpayer files an offer to delay this
enforcement action the offer may be returned as "
solely to delay collection" .
5.8.3.19.2
(09-01-2005)
Examples and Discussion
-
The following are examples of offers considered
submitted " solely to delay collection" based
on re-submission after a prior rejection or return:
Example:
During initial processing of an offer, it is
discovered on AOIC that the taxpayer had a previous
offer returned. This offer was closed six months ago
as part of the "No Reply " process. The AOIC
case history indicated that the taxpayer did not
provide any bank statements with the first offer and
did not respond to the combo letter sent. No bank
statements were provided with the new offer
submission. No special circumstances were indicated.
Example:
A taxpayer resubmits an offer that was rejected
because the amount offered was $10,000 below the
reasonable collection potential (RCP). The original
amount offered was $10,000. The current amount offered
is $10,100. There is no change in financial condition
and no special circumstances were indicated.
Example:
A taxpayer submits an offer for $3,000 to be paid
within 90 days of acceptance. A prior offer was
submitted for $10,000 to be paid within 90 days. The
investigation of the initial offer submission resulted
in the offer being rejected with appeal rights. During
that offer investigation it was determined that a
piece of property was transferred to a non-liable
spouse for no consideration and that a clear
transferee issue exists. The value placed on the
transferred property was $30,000, and was included in
the reasonable collection potential (RCP). The
taxpayer failed to request a timely appeal on the
rejected offer. There were no special circumstances
indicated.
Example:
During initial processing of an offer in
compromise, AOIC indicates there have been three
offers submitted by the taxpayer over the past 18
months. All three were returned for failure to provide
requested CIS information. The closed return file
indicates the taxpayer was asked to provide a
financial statement for a closely held corporation,
which the taxpayer holds 75% interest in and is the
corporate president. A Form 433-B for this corporation
was requested during the offer investigation. The
offer specialist clearly documented in the file the
taxpayers interest and position in this corporation.
The request was clear and specific and the taxpayer
refused to provide this information claiming the IRS
has no right to place a value on the corporation when
determining his ability to pay on personal tax
liabilities. The newly submitted offer package does
not include a Form 433-B for the corporation and the
Form 433-A indicates the same corporation is the
taxpayers current employer.
Example:
An offer is submitted for $30,000 payable within 90
days of acceptance. Research on AOIC indicates this
the second offer submitted by the taxpayer. A prior
offer was submitted for $20,000 payable within 90 days
of acceptance. The original offer was rejected with
appeal rights, the taxpayer filed a timely appeal, and
Appeals sustained the rejection. A review of the prior
offer file indicates the taxpayer has the ability to
full pay the outstanding liability through an
installment agreement. The total liability is for
$40,000. A review of the financial information
indicates the taxpayer still has the ability to full
pay the liability. The original offer was received 18
months ago and no payments have been made during this
period. There is no change indicated on the financial
statement, except the taxpayer has a new employer. The
taxpayers income remained the same. There are no
special circumstances indicated.
Example:
A taxpayer filed an offer in January 2005. The
offer was returned after the Offer Examiner requested
that the taxpayer make estimated tax payments for the
tax year 2004. The taxpayer failed to comply and
therefore the offer was returned for noncompliance. In
June 2005 the taxpayer submitted a second offer, which
included the 2004 liability. Because the taxpayer
failed to make the required estimated payments for
2004 and did not correct the defect by paying the full
liability with the filing of the return, the offer
should be returned. No special circumstances were
indicated.
-
The following are examples of offers considered
"solely to delay collection" based on
re-submission after a prior default within the past
year:
Example:
The taxpayer had an offer accepted 18 months ago
for $20,000 to be paid within 90 days of acceptance.
The taxpayer paid $5,000 within 120 days of acceptance
and failed to pay the balance of offer funds. The
offer was defaulted for failure to meet the terms of
the offer. A new offer is now submitted for $10,000 to
be paid within 90 days of acceptance. Financial
statements submitted with the new offer show no
decrease in ability to pay and special circumstances
were not cited and/or evident.
Example:
The taxpayer had an offer accepted for $10,000 paid
within 90 days of acceptance. Subsequent to the
acceptance the taxpayer incurred 2 additional years of
income tax liabilities. The offer was defaulted
because the taxpayer did not resolve the two
additional liabilities. A new offer has been submitted
for $5,000, that includes the prior offer periods and
the two new periods. There are no special
circumstances.
-
The following are examples of offers considered
"solely to delay collection" based on a prior
collection analysis and determination of ability to pay:
Example:
Taxpayer owes $500,000. An offer is submitted for
$15,000. The Collection Information Statement (CIS),
as submitted by the taxpayer, indicates the taxpayer
has recently been fired from his job where he had been
earning $200,000 a year. The CIS also reflects a
personal residence with a Fair Market Value (FMV) of
$1.5 million and outstanding mortgage of $750,000
leaving equity of $750,000; a piece of property owned
free and clear valued at $60,000, a large boat with a
value of $140,000 which is unencumbered. Final demand
has been made and a collection employee has indicated
to the taxpayer that a Notice of Federal Tax Lien (NFTL)
will be filed and possible enforcement action if the
taxpayer does not full pay the liability. The
investigation has shown that there are no special
circumstances to be considered.
Example:
Taxpayers owe a joint 1040 liability for 1997 of
$139,854 and submitted an offer for $250. Both
taxpayers are self-employed: The husband is a painter
and the wife is a real estate sales person. They have
no future income potential. They own an unimproved lot
valued at $14,700, a personal residence valued at
$177,500, six automobiles and two horse trailers
valued at $20,775. Their total reasonable collection
potential (RCP) is $127,191 based on the equity in the
assets. The balance due period was in active
collection inventory prior to the offer submission.
The collection employee advised the taxpayer to secure
a loan on their equity or levy action would be
initiated. The taxpayer refused to pay more than the
proposed $250 and submitted the offer instead of
making any payment to their tax liability. The
investigation has shown that there are no special
circumstances to be considered.
Example:
Taxpayer owes $32,000 and submits an offer for
$100. The reasonable collection potential (RCP) is
based on an ability to pay $400 per month. The
earliest CSED's will expire within 5 months of the
receipt of the offer , which is where the majority of
the liability is assessed. The taxpayer has been
advised of the CIS analysis and monthly ability to
pay, but submitted an offer for $100. The reason given
was that he wanted the tax liability
"forgiven" and all he wants to pay is the
$100 offer amount. No special circumstances were
indicated.
5.8.3.19.3
(09-01-2005)
Procedures for Return of Offers Submitted Solely to
Delay Collection
-
The determination that an offer was submitted
"solely to delay collection" may be made
immediately after the offer is deemed processable or at
any time during the offer investigation when the facts
support the decision.
-
The determination that an offer was submitted after a
prior reject or default can be supported by reviewing
records on AOIC and IDRS transactions:
-
To determine if the re-submission is materially
different from the prior rejected or defaulted offer:
-
Request the prior closed offer file, if
available, from the appropriate office. Previously
rejected closed offer files are located in the
office that concluded the offer. Previously
defaulted offer files are maintained in the Campus
OIC Unit servicing the office that closed the
offer.
Note:
The Centralized Offer in Compromise (COIC)
Examiners will not be required to secure and
review closed files as long as there is
sufficient information in the AOIC/ICS history
to establish that an offer is a re-submission
"solely to delay collection" .
-
Compare the information contained in the
original offer file with the resubmitted offer
package to determine if the offer was submitted
" solely to delay collection" .
-
When an Offer Specialist (OS) identifies that an
offer was submitted "solely to delay
collection" , Form 657, Revenue Officer Report,
must be completed and submitted to the group manager for
approval. If the group manager concurs, the case will be
closed immediately as a return. A copy of the Form 657
should be forwarded to the appropriate revenue officer
group manager to explain why the offer was not
investigated and to refer the balance due accounts for
appropriate collection activity.
Note:
Coordination should occur to ensure no levy is
issued until after
the return letter is sent.
-
Centralized Offers in Compromise (COIC) Examiners
will not be required to complete a Form 657, but will be
required to document the AOIC history that the offer was
determined to be a re-submission solely to delay
collection. If the COIC Unit manager concurs, the offer
will be closed immediately as a return.
-
When revenue officers (RO) determine an offer is
submitted " solely to delay collection" , they
will complete a Form 657, Revenue Officer Report, and
submit it to their group manager for approval. If the
revenue officer group manager concurs, the Form 657 will
be forwarded to the offer group manager or the COIC
manager. If the offer group or COIC manager concurs, the
offer will be closed as a return.
Note:
Coordination should occur to ensure no levy is
issued until after the return letter is sent.
-
If an offer was forwarded by a Revenue Officer (RO)
and the Centralized Offers in Compromise (COIC) unit
deems it to be processable, but the RO has determined
that the offer was submitted to "solely delay
collection " , the case must include the Form 657,
Revenue Officer Report, detailing the reason(s)
supporting the decision and approved by the field
manager.
-
When the investigating employee determines an offer
was submitted "solely to delay collection" ,
regardless of the status of the balance due periods
prior to the offer submission, the periods should be
placed into the appropriate collection status to ensure
that necessary collection actions are initiated. If the
accounts were in Status 26 prior to the offer
submission, the case should be reassigned to the field.
If the balance due periods were not in Status 26 prior
to the offer submission, discuss the case with the field
group manager to determine if assignment to the field is
appropriate. If the field group manager does not assign
the case into inventory, the periods should be placed
into ACS status.
Note:
These accounts should not be allowed to
systemically proceed to notice status.
-
The Form 657, Revenue Officer Report, serves to
establish coordination between the field group, the
offer group, and the Centralized Offers in Compromise
(COIC) site to provide case documentation regarding
these determinations, and to ensure collection action is
not pursued until the return is approved.
Exhibit 5.8.3-1
(09-01-2005)
COIC Application Fee Tracking Report
|
The above
limited information is intended for
informational purposes only. If legal advice or other expert
assistance is required, the services of a competent professional should
be sought, and this general information should not be relied upon
without such professional assistance. |
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CAUTION: There are many providers of services on the
internet who will submit your Offer in Compromise forms.
However, such providers merely have you complete the forms.
These bargain basement "Offer experts" may be only
mailing the forms you prepare to the Internal Revenue Service.
Thus, they have done nothing for you. In fact, they may end up
costing you more because critical review and analysis has not
been done. When completing the financial statement forms and
making the Offer, you are painting a financial picture that will
determine the amount of an acceptable Offer. Unless your
representative has the necessary skills and experience, you may
have paid a small fee, only to be subjected to settling for more
under the Offer than you otherwise should have. Your
professional must have experience in: calculating your income
and expenses; determining the amount of the offer you should
make; valuing your assets and liabilities; reviewing joint
ownership considerations; working with the tax law and IRS
internal procedures; arguing the facts and the law, and
negotiating with the IRS.
The IRS has a history of intimidation, and let's face it,
they will take advantage of any taxpayer who represents himself,
and even a taxpayer's advocate who is weak. Remember, IRS Offer
Specialists generally have "collection" backgrounds
and they come at you from the perspective of getting as much
money as they can.
In the end analysis, you should measure the benefits
you derive from the final result. For a taxpayer to engage
someone who merely mails in your Offer forms for a
"bargain" fee,
what at first blush looked like "such a deal", may in
reality end up costing you many thousands of dollars more
because you didn't choose a tax professional who would negotiate
the best settlement for you.
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For
assistance please
contact A. Nathan Zeliff, Attorney at Law |
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