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Part 5. Collecting Process

Chapter 8. Offer in Compromise

Section 3. Processability

5.8.3  Processability

5.8.3.1  (09-23-2008)
Overview

  1. All offer receipts other than those based solely upon DATL are reviewed to determine if they are processable. No application fee or TIPRA payment is due with the submission of DATL offers, including DATL offers to compromise a TFRP or PLET. 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 explains the procedures to be followed for determining jurisdictional responsibility, processability, and case building.

5.8.3.2  (09-23-2008)
Routing Cases Based on Jurisdictional Responsibility

  1. The following table provides guidance when it has been determined that Collection does not have jurisdictional responsibility:

    If responsibility lies with… Then…
    Department of Justice (DOJ) Contact Area Counsel to determine the status of the pending bankruptcy or litigation and whether Collection has jurisdiction to process the offer. If the DOJ requests the offer be sent directly to them, delete the offer from the AOIC system and forward the case to the DOJ.
    Examination Send the offer directly to the centralized DATL processing unit located at the Brookhaven campus. No fee is required for these offers. Do not open a record on the AOIC system. If the record was inadvertently loaded to AOIC, delete the record.
    Appeals Determine processability, complete the AOIC "Appeals Fee Screen" and follow the established Appeals application fee and payment procedures.

5.8.3.3  (09-23-2008)
Combined Application Fee Payment Processing

  1. Multiple offers submitted with one remittance intended as the application fee(s) and/or payment(s) for all will be processed. Load the cases to the Automated Offers in Compromise (AOIC) system. Prepare the AOIC Combo Letter with the "Y" paragraph. If the taxpayer fails to respond to the request, return the offer.

5.8.3.4  (09-23-2008)
Processability

  1. COIC PE's are responsible for determining processability of all offers received and worked by the Service, including DATL offers to compromise a TFRP or PLET. All other DATL offers are processed by the Centralized DATL Unit. See IRM 5.8.2.2. This determination must be made within 14 calendar days of receipt of an OIC at the appropriate COIC site.

  2. Each new receipt will fall into one of the following categories:

    • Not processable – The taxpayer does not meet one or more of the minimum established criteria for offer consideration.

    • Processable – The taxpayer meets the minimum criteria for offer consideration.

5.8.3.4.1  (09-23-2008)
Determining Processability

  1. An OIC will be deemed not processable if one or more of the following criteria are present:

    1. Taxpayer in Bankruptcy – An offer will not be considered while a taxpayer is in bankruptcy. See IRM 5.8.10.2, Bankruptcy.

    2. 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.

      Note:

      No application fee or TIPRA payment is required for offers filed solely based on DATL.

    3. Taxpayer did not submit the required initial payment with the offer – If the taxpayer fails to submit either of the following, the offer will be returned as not processable.

  2. Lump Sum Cash offers must include 20% of the offered amount or a signed Form 656-A.

    Note:

    If the taxpayer submits the $150 application fee and a portion (but not all) of the required initial lump sum payment, the offer will be deemed processable, but not perfected.

  3. Short Term and Deferred Periodic Payment offers must include initial proposed installment payment must be submitted with the offer or a signed Form 656-A.

  4. The Form 656-A applies only to individual taxpayers.

5.8.3.4.2  (09-23-2008)
Offers Submitted Solely for Unassessed Liability(s)

  1. An unassessed liability is a liability where no assessment has been made. These procedures do not apply to unassessed Examination or Automated Underreporter cases. Follow procedures in IRM 5.8.4.12.

  2. If an offer is received that is solely for unassessed periods, COIC will determine processability following procedures in IRM 5.8.3.4.1.

    If… Then…
    The offer is not processable Return the offer following procedures in IRM 5.8.3.9
    The offer is processable, research IDRS for the return(s), and if IDRS indicates the return has been received, but has not posted

    1. Continue working the offer

    2. Post the payments to the taxpayers account using Form 2515 with a TC 670 using one of the following DPCs: DPC 33 (Offer in Compromise $150 application fee); DPC 34 (Offer in Compromise 20% lump sum/initial periodic payment); DPC 35 (Offer in Compromise subsequent payments made during the offer investigation)

    3. Request input of a TC 570 with $".00" , to allow the payment to post to the taxpayers account, before the assessment.

    The offer is processable, and IDRS does not indicate the return has been received

    1. Return the offer as a processable return following procedures in IRM 5.8.7.2.2

    2. Do not return the application fee

    3. Return the TIPRA payment(s), and any deposit. Because we do not have an assessment, we must return any TIPRA payment(s), or deposits.

    4. Post the application fee to the 2395 Account only.

    5. Generate the Return Letter on AOIC using paragraph "T."

    6. Notate the Form 2424 with the following comment:"offer submitted for an unassessed liability"

5.8.3.4.3  (09-23-2008)
Determining Processability for Appeals Collection Due Process Offers

  1. If Collection files a lien while an offer is being investigated; complete the investigation. If the taxpayer files a CDP request because of that lien and the CDP remains open, the offer falls under the jurisdiction of Appeals. Collection cannot work any offer that has an open CDP case. If the case falls under the jurisdiction of Appeals, forward the entire case to Appeals and delete the offer from AOIC.

    Note:

    Appeals may require Collection's assistance to complete the investigation on complex cases. In those cases, an Appeal Referral Investigation (ARI) may be issued to the field.

  2. COIC will apply the same processability criteria as outlined in IRM 5.8.3.4.1, Determining Processablity, but do not load these offers on the AOIC.

  3. CDP offers must be received with the required remittances to meet the basic processability criteria and processing guidelines as outlined in IRM 5.8.3.5, Processing Application Fees and Offer Payments/Deposits. These offers will not be controlled on AOIC and will require special handling as follows:

    • Payments made on offers not controlled by the AOIC program must be processed manually using a specially designed RACS numbering scheme.

    • A manual Form 2515 must be prepared on CDP offers. Include all taxpayer entity information, including the TIN.

  4. The following numbering scheme should be used in place of the offer number on the Form 13479 and Form 2515:

    • The first two digits should be 17 (Memphis COIC) or 18 (Brookhaven COIC), as appropriate.

    • The third digit should designate the type of offer (i.e., 1 – for Appeals; 2 – for Exam/DATL; 3 – for DOJ; and 4 – for CI).

    • The fourth and fifth digits should be the area office (i.e., Appeals AO) where you are sending the case.

    • The six and seventh digits should be the year.

    • The remaining three digits should be the sequence #.

    • Assign one RACS number per offer. Up to 5 offers may be listed on each Form 13479.

    • Maintain a log of manually assigned RACS numbers.

    • Send a copy of the Form 2515 to MOIC for back-end monitoring.

  5. The RACs number should be 10 digits.

    Example:

    1714806123

  6. The payment date on the Form 2515 must be the IRS received date.

  7. Appeals will provide COIC with both processable and not processable determination letters containing all necessary information, including the Appeals contact information on Form 3210. Appeals will provide two copies of Form 3210. One copy is for COIC clerical filing and the other copy will remain with Form 656 and related documents. It is the responsibility of COIC to sign, date, and mail the applicable letter based on the processability determination.

    If... Then...
    The offer is not processable and a remittance was attached

    1. Prepare the not processable letter and the Form 656 to mail to the taxpayer in accordance with the procedures in IRM 5.8.3.5.

    2. Fax a copy of the not processable letter to the Appeals employee. The Appeals employee name and fax number should be noted on the Form 3210. Also, include a copy of the 2515 showing the designation of the monies received with the offer; noncompliance issues; if additional forms and fees are required.

      Note:

      The Form 3210 should remain with the case until a processability determination has been made. A copy should be retained by the Clerical staff in Appeals.

    The offer is not processable and no remittance was attached Prepare the not processable letter and the Form 656 to mail to the taxpayer in accordance with procedures in IRM 5.8.3.5, Processing Application Fees, Offer Payments and Deposits.
    If the offer is processable and a remittance is attached

    1. Access the Appeals Fee Screen application of AOIC and input the fee and payment data.

    2. Input the Appeals employee information noted on the Form 3210 and the Appeals Fee Screen history.

    3. Document the payment type, application of the funds, and taxpayer designation, if any, on the Form 3210.

    4. Write the RACS number on the upper left corner of the Remittance.

    5. Prepare the Form 13479 in accordance with IRM 5.8.3.5.1

    6. Mail the processability letter to the taxpayer.

    7. Send a copy of the letter and the original offer package to the Appeals employee designated on the Form 3210. The Appeals employee name and fax number should be noted on the Form 3210.

      Note:

      The Form 3210 should remain with the case until the processability determination has been made. A copy should be retained by the Clerical staff in Appeals.

    If the offer is processable and the taxpayer submitted and qualified for the Form 656-A

    1. Mail the processability letter to the taxpayer.

    2. Send a copy of the letter and the offer package to the designated Appeals employee on Form 3210. The Appeals employee name and fax number should be noted on the Form 3210.

  8. When an offer is received in conjunction with a CDP and is deemed to be processable, the COIC site will input the TC 480 on all related tax periods. This includes the input of a TC 480 on all balance due periods not specifically listed on the Form 656. If the module is an MFT 31, request input of TC 470 with Closing Code (CC) 90 to suspend collection activity. It will be the responsibility of Appeals to perfect the offer document.

  9. COIC will advise the Appeals/Settlement Officer when it is necessary for the Appeals employee to secure additional Form(s) 656, application fee(s), and/or required initial payments prior to the investigation by generating the letter identifying "Option Y" criteria. See IRM 5.8.3.7, Form 656 Application Fee, TIPRA Payments and Perfection, for examples of these situations. The COIC site will prepare Form 3210 for transmittal of the processable offer back to Appeals. The Form 3210 will include the following information:

    • List the specific periods with the TC 480

    • Identify an "Option Y" condition

    • Copy of 2515 (showing the designation of money; i.e., fee, periodic payment received, 20% or partial payment of 20%)

    • Non-compliance issues

    • Additional forms, fees, and/or payments

  10. 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. The Form 2515 should show the IRS received date for the date of the payment.

    If… Then…
    It is determined that the case is under Appeals jurisdiction and the CDP condition is identified while the offer is being processed through COIC

    • The COIC site CDP coordinator will advise the AO/SO of the processability determination.

    • The AO/SO will generate and transmit via encrypted E-mail to the COIC site CDP coordinator the appropriate appeals processable and not processable letters.

    • The COIC site will delete the offer record from AOIC and load the fee information to the Appeals application fee screen of AOIC.

    • The COIC site will follow the procedures in IRM 5.8.3.4.2(2) (above) to process the letter and application fee.

    • COIC will change the offer number on the Form 13479, COIC Application Fee Tracking Report, to the Appeals RACS number.
    It is determined the case is under Appeals jurisdiction but the CDP condition is identified after the offer has been deemed processable and moved to a workable inventory COIC will:

    • Delete the offer record from AOIC.

    • Load the information to the Appeals application fee screen.

    Note:

    The application fee and initial offer payment should have already been applied at this juncture.

  11. Offers submitted directly to the Compliance employee, are occasionally identified as having an open CDP control. When this occurs, the COIC site CDP coordinator will research the Appeals Centralized database System (ACDS) to determine if the CDP is still open, and if a determination letter has been issued.

  12. 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.

5.8.3.4.4  (09-23-2008)
Exception Processing for Offers in Compromise Investigations Involving Taxpayers in Combat Zones

  1. 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.

  2. Section 7508 postpones the time for performance of certain time-sensitive acts for the period of time that an individual serves in one of the three situations described below, plus the period of continuous qualified hospitalization attributable to an injury received while serving in one of these situations, plus the next 180 days:

    • Individuals serving in the Armed Forces in an area designated by the President of the United States as a CZ for purposes of section 112, or serving in support of such forces, including individuals serving in an area certified by the Department of Defense as being in direct support of military operations in a CZ, for which the person receives special pay for duty subject to hostile fire or imminent danger;

    • Individuals deployed outside the U.S. away from the individual’s permanent duty station while participating in an operation designated by the Secretary of Defense as a contingency operation (as defined in 10 U.S.C. § 101 (a) (13); or

    • Individuals serving in the Armed Forces in a qualified hazardous duty area.

  3. Offers that are received and deemed not processable due to the application of section 7508 relief 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 CZ notification for section 7508 relief due to one of the above-described situations is received after the letter was issued

    • Offers in which a determination was made to accept, return, or reject the offer

    • Offers in which a return or rejection letter was issued prior to notification for section 7508 relief due to one of the above-described situations

  4. For all of the offer situations identified in paragraph (3) above, the following actions should be taken:

    • Prepare the Form 3244 or 4844 requesting input of TC 500 CC 56 on the taxpayer's 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 AOIC 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 POA, or in the case of a joint offer, the spouse is able and willing to provide all substantiation.

5.8.3.5  (09-23-2008)
Processing Application Fees and Offer Payments/Deposits

  1. The Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) was signed into law on May 17, 2006. The new law changed the rules for the submission of OIC.

  2. The law stipulates that OIC's received on or after July 16, 2006 must include the application fee, and based on the offer terms, one of the following:

    1. Lump Sum Cash Offers – The submission of any lump-sum OIC should be accompanied by 20 % of the amount of the offer or a 656-A. The term "lump sum" means any offer of payments made in 5 or fewer installments.

      If… Then…
      A taxpayer submits a Lump Sum Cash offer and the terms are a single amount payable in 5 months or less Load the offer on the Terms Screen as a "Cash" offer
      The taxpayer submits a Lump Sum Cash offer and the terms are a single amount payable in more than 5 months Load the offer on AOIC Terms Screen as a "Deferred" offer

    2. Short Term and Deferred Periodic Payment Offers – The submission of any periodic payment OIC should be accompanied by the amount of the first proposed installment or a 656-A.

      Short Term Periodic Payment Offers Deferred Periodic Payment Offers
      If…
      The taxpayer submitted an offer payable in 6 to 24 months       		If…
      The taxpayer submitted an offer payable in the remaining time on the statutory period for collection
      Then…
      Load the offer on AOIC "Terms Screen" as a deferred offer       		Then…
      Load the offer on AOIC "Terms Screen" as a deferred offer

  3. Document the terms of the offer on the AOIC Terms Screen.

  4. If the taxpayer submits both the application fee and the required initial TIPRA payment (20 % or first installment) in one check, the $150 Application Fee will be entered first and the remainder will be applied as the payment amount. A decision concerning whether the submitted payment complies with the offer terms will not be made until a processability determination has been completed.

  5. Insufficient remittance of the required initial lump sum cash payment (20% of the offer amount) will be considered a perfection issue.

  6. Insufficient periodic payments will render the offer not processable and the offer will be returned to the taxpayer. Processing procedures are addressed in IRM 5.8.3.11, Types of Perfection.

  7. The required initial TIPRA payment (20% or periodic payment) will be applied to the taxpayer’s liability in all instances. These monies are not refundable to the taxpayer.

  8. Taxpayers may designate how these payments are to be applied to the tax liabilities. If the taxpayer does not designate how these payments are to be applied, the IRS will apply them to the tax liability with the earliest unexpired CSED.

  9. Application fees will continue to be refunded to the taxpayer on not processable offers.

  10. Qualified taxpayers may continue to submit Form 656-A for a waiver of the application fee. Taxpayers who qualify for a waiver of the application fee will also be exempted from all TIPRA payments. If, during the investigation, the OI determines the taxpayer does not qualify for the waiver, make one attempt to request the taxpayer submit the required initial TIPRA payment and application fee. If the taxpayer fails to respond, the offer will be returned as a processable return.

  11. Incoming offers will be sorted in the following categories:

    • Form 656 with check(s) for more than $150

    • Form 656 with check for $150 only and no waiver

    • Form 656 with waiver and a check for more than the $150 application fee

    • Form 656 with check for $150 and a waiver

    • Form 656 with waiver only

    • CDP (with checks)

    • Out of Area Transfers (with checks)

    • DATL or Form 656 L (with checks)

  12. If the taxpayer submits only the $150 application fee and does not submit the required initial TIPRA payment (any portion of 20% of a lump sum cash offer or the required initial payment of a periodic payment offer), the offer will be deemed not processable upon receipt, and will be returned. These offers must receive expedited processing to generate the return letter and update the AOIC history to meet the 24-hour deposit requirement.

  13. The following are procedures for immediate processing of the not processable returns due to receipt of the $150 application fee submitted with a personal check.

    1. Complete a separate Form 13479 for those offers to be returned based on the receipt of only the $150 application fee.

    2. Enter no more than 5 offers per 13479.

    3. Load onto AOIC in "U" status.

    4. Enter $150 in Column H of the Form 13479.

    5. Hand-carry the Form 13479 to the Campus Support Mail Team to get personal checks stamped as "non-negotiable."

      Note:

      COIC will use a "non-negotiable" stamp on personal checks when the taxpayer fails to submit the appropriate TIPRA payment or the application fee. The Form 13479 will be used for control purposes only and should be maintained as a record of the payment(s) received. The Form 13479 must also indicate the check(s) were stamped as "non-negotiable" and the date they were stamped. The checks must be stamped "non-negotiable" within 24 hours of receipt.

    6. Personal checks stamped "non-negotiable" will be returned to the designated COIC function employee housed in the Campus Support mail area.

    7. Personal checks stamped "non-negotiable" will be suspended by the COIC function and maintained in a locked file until the completion of the return package.

    8. Personal checks stamped "non-negotiable" and the offer package should be returned to the taxpayer through normal mail out procedures.

    9. The AOIC history must be documented indicating the check was stamped "non-negotiable" and include the date it was stamped.

      Note:

      Once the checks have been stamped non-negotiable and handled according to the procedures above, the offer package should be assigned to a PE for completion of the return letter and offer package.

  14. The following are procedures for immediate processing of the not processable returns due to receipt of the $150 application fee submitted with certified funds (money order, bank check, cashiers check, government check).

    1. Certified funds will be deposited upon receipt and processed through the normal work stream for both the clerical and process examiner procedures.

      Note:

      These payments must be deposited immediately to meet the 24-hour deposit requirement. Certified funds cannot be stamped "non-negotiable" and, therefore, cannot be held until the return letters can be generated.

    2. The AOIC history must be documented indicating the check was stamped "non-negotiable" and include the date it was stamped.

      Note:

      Once the checks have been stamped non-negotiable and handled according to the procedures above, the offer package should be assigned to a PE for completion of the return letter and offer package.

    3. Request a manual refund by preparing the Form 3753, Manual Refund Posting Voucher.

      Note:

      Form 3753 manual refunds on not processable offers will be processed according to normal manual refund procedures outlined in IRM 21.4.4, Manual Refunds.

    4. Prepare the offer package to be returned to the taxpayer.

  15. The following procedures will only apply if the processability determination and return package can be completed on an expedited basis and the offer package with the certified funds payment instrument can be returned to the taxpayer within 24 hours of receipt.

    1. Hand carry the certified funds payment instrument and return offer package to the Campus Support Mail Team within 24 hours of receipt. The Campus Support Mail Team is responsible for preparation and mailing of the certified package.

    2. The Form 13479 must be completed by entering $150 in Column H in red ink to indicate the payment was returned via certified funds to the taxpayer.

    3. The certified funds payment instrument must be maintained in a secured area while the processability determination is being made.

  16. If the processability determination and return package cannot be completed within 24 hours of receipt, the certified funds payment instrument must be deposited upon receipt and processed in accordance with the instructions below.

  17. Management must establish controls to ensure returned offer packages are associated with the "non-negotiable" payment instruments and processed in accordance to established procedures.

  18. It is possible the taxpayer may submit the $150 Application Fee, the required initial TIPRA payment, and a deposit with the Form 656. See IRM 5.8.2.7 for further discussion on what constitutes a deposit.

    • If submitted on one check, the required application fee, required initial TIPRA payment, and a deposit must be entered as one amount on the Form 13479.

    • If submitted on separate checks, the application fee, required initial TIPRA payment, and deposit will be entered on separate lines on the Form 13479.

  19. All checks must be deposited within 24 hours, with the exception of those personal checks submitted with offers deemed not processable.

    • The $150 application fee will be deposited to the 4710 Account using Form 13479.

    • The application fee will be applied to the tax liability with the earliest CSED.

  20. Once the offer is deemed processable, the process examiner will update AOIC changing the "N" to a "Y" and process the offer in accordance with established procedures.

  21. If the offer is deemed not processable after the check(s) is deposited, prepare the Form 3753, Manual Refund Posting Voucher, to manually refund the $150 application fee to the taxpayer. Once the offer is deemed not processable take the following steps:

    • Change the AOIC record to "N" status

    • Complete the Form 2515 (Show the IRS Received Date at the payment date)

    • Generate the return letter

    • Complete the Form 3753

    • Document the AOIC history that a 3753 was completed and processed.

    • Enter the comment "Refund from 4710 Account" on Form 3753 and attach a copy of the Form 13479 and Form 2515 as backup.

    • Prepare the offer package to return to the taxpayer;

      Note:

      Form 3753 manual refunds on not processable offers will be processed according to normal manual refund procedures outlined in IRM 21.4.4, Manual Refunds.

  22. The required initial TIPRA payment and the deposit (if applicable) will be deposited to the 4710 Account. Once a processability determination has been made, annotate the Form 2515 with the following abbreviations to move the payment from the 4710 Account to the taxpayer’s liability(s) as applicable.

  23. Form 2515 Annotations (Abbreviations) – COIC will use the following to annotate the Form 2515 beside the appropriate entry in the "Amount" column. The blank space at the bottom of the form may be used for any additional remarks.

    • Application Fee -------------------App Fee

    • Payment -----------------------------Pymt

    • Deposit-------------------------------Dep

    • Estimated Payment---------------ES

    • Refunded to Taxpayer------------RefTP (to be used when COIC prepares the 3753 to refund the Application Fee and sends it to Cincinnati for processing)

    • Designated Payment-------------DsgP (COIC will also indicate MFT and period)

  24. In all cases, the required initial payment and subsequent payments will be applied to the taxpayer’s account, whether the offer is deemed processable or not processable. These funds are non-refundable and should be moved immediately posted to the taxpayer’s account (either as designated by the taxpayer or to the Government’s best interest if not designated). This does not include deposits or application fees. Deposits and application fees may be refundable.

  25. If the taxpayer also submitted a deposit and the offer is not processable, the deposit should be refunded to the taxpayer. Prepare the Form 3753, Manual Refund Posting Voucher, to refund the deposit from the 4710 Account, and forward it to MOIC for processing. Annotate the AOIC history screen.

  26. If the amount submitted with the Form 656 exceeds the amount required, the entire amount will be treated as a non-refundable payment of tax, unless the taxpayer indicates on the Form 656 to treat the excess amount (less the $150 application fee if one check was submitted) as a deposit.

  27. If the taxpayer sends one check, the amount submitted exceeds the required amounts, and the taxpayer indicated how the payment should be applied (for example, as a deposit or an estimated tax payment), process the amount according to the taxpayer’s designation. Any payments other than the application fee, required TIPRA payment, or deposit must be processed on Forms 2424 with the appropriate transaction code and designated payment code (DPC). For example, an estimated payment will be a TC 430 (for IMF) or TC 660 (for BMF), instead of TC 670. This determination will be made by the PE when making a processability determination and applying payments on the Form 2515 using the IRS received date as the payment date.

  28. If the taxpayer submits multiple checks:

    • Process the $150 application fee check, the required initial TIPRA payment, and any deposit, on the Form 13479,

    • Additional payments submitted through individual checks will be processed on Forms 13479 and 3244 and processed under the manual deposit procedures.

    • Prepare a separate Form 13479 for these payments.

    • Hand carry the Form 13479 and attached Form(s) 3244 and check(s) to the Campus Support Mail Team for processing.

  29. The "If and Then" table below provides the criteria for processing on the above sorts:

    If you receive a… Then…
    Form 656, the $150 application fee and required initial TIPRA payment and the terms of the offer is lump-sum or periodic payment

    1. Load the offer in "U" status and complete the Entity screens.

    2. Document the case history with check application information, including the Batch Number.

    3. Complete the Form 13479 by entering the following: (1) Offer Number; (2) SSN/EIN; (3) Name Control; (4) Check Amount; (5) Check Number; (6) Check Type.

    4. Generate Form 2515, Record of Offer-in-Compromise for the total amount of the check(s).
    Form 656 with the $150 application fee and no required initial TIPRA payment (20% or first installment payment) Offers received with a check for the $150 application fee only are deemed not processable upon receipt and will be sorted by the clerical function during the "fine" sort.

    1. Load the offer in"U" status.

    2. Update the AOIC history documenting that the offer is not processable.

    3. Complete the Form 13479 for a not processable return.

    4. If the taxpayer submitted a personal check, send the Form 13479 and check to the Campus Support Mail Team to stamp the personal check as "non-negotiable" as appropriate.

    5. If the taxpayer submitted certified funds (money order, certified check, etc.) the funds will be deposited and the offer worked through normal procedures.

    Form 656 from an individual taxpayer with both a $150 application fee and a signed Form 656-A certification, and the required initial TIPRA payment

    1. Complete the AOIC Entity Screen and the Form 13479 to treat the $150 and the TIPRA payment a deposit.

    2. Prepare the Form 2515 designating the payment(s) as a deposit.

    3. Complete the AOIC Application Fee screen and input "Li" in the "Waiver Criteria" field.

    Note:

    If during investigation, the offer examiner determines the taxpayer does not qualify for the waiver, request the payments be applied to the liabilities, and continue working the offer.

    Form 656 from an individual taxpayer with both a $150 application fee and a signed Form 656-A certification, and no required initial TIPRA payment

    1. Complete the AOIC Entity Screen and the Form 13479 to treat the $150 as a deposit.

    2. Prepare the Form 2515 designating the $150 as a deposit.

    3. Complete the AOIC Application Fee screen and input "LI" in the "Waiver Criteria" field.

    Note:

    If during investigation, the offer examiner determines the taxpayer does not qualify for the waiver, request the taxpayer submit the required initial TIPRA payment. Allow a reasonable amount of time to respond. If the taxpayer does not respond with the required payment, the offer will be a processable return. If the taxpayer submits the payment(s), continue working the offer.

    Form 656 with a signed Form 656-A certification (instead of the $150 application fee and required initial payment) Complete the AOIC Application Fee screen and input "LI" in the "Waiver Criteria" field.

    Note:

    If during investigation, the offer examiner determines the taxpayer does not qualify for the waiver, request the taxpayer submit the required initial TIPRA payment and application fee. Allow a reasonable amount of time for a response. If the taxpayer does not respond with the required payment and fee, the offer will be a processable return. See IRM 5.8.4.7.1(4).

    CDP Form 656

    1. Complete the Form 13479 by entering the following: (1) RACS number; (2) Offer Number; (3) SSN/EIN; (4) Name Control; (5) Check Amount; (6) Check Number; (7) Check Type; (8) The $150 Application Fee; (9) Amount of the required initial TIPRA payment and deposit, if any.

    2. Prepare the Form 2515

    3. Complete the CDP AOIC Remittance Screen

    4. Process in accordance to current guidelines

    5. Document the AOIC history with payment application information
    Out of Area Transfers

    1. Process according to the procedures outlined above, as appropriate.

    2. Make the processability determination and apply the initial TIPRA payment to the taxpayer's liability, as appropriate

    3. Transfer to the correct area office
    DATL offer (Form 656 L) for a TFRP only liability with a separate application fee DATL offers (Form 656-L) are exempted from application fees and all TIPRA payments. Any fee or payment will be treated as a deposit and processed on the Forms 13479 and Form 2515.
    DATL offer (Form 656 L) for a TFRP only liability with a single remittance that represents both an application fee and a deposit.

    1. Apply the entire amount as a deposit to the offer.

    2. Complete the Form 13479

    3. Prepare Form 2515

    Note:

    DATL offers are still exempted from fees and payments. Any fee or initial payment will be treated as a deposit.

    Note:

    DATL offers (and any other manually monitored offer such as CDP or DOJ) require the same RACS numbering scheme in place of the offer number on the Form 13479, COIC Remittance Tracking Report and Form 2515 as outlined in IRM 5.8.3.4.3, above.

  30. Subsequent payments (periodic payment offers) made during the offer investigation must be deposited within 24 hours of receipt using Form 3244 and in accordance with the Discovered Remittance procedures outlined in IRM 3.8.46.1, Discovered Remittances.

    Note:

    Subsequent installment payments of a periodic payment offer are non-refundable and should be applied to the earliest tax liability with the earliest CSED or as designated by the taxpayer.

  31. Process the check through the Manual Deposit function at the Cincinnati Submission Processing Center.

  32. Forward to the Campus Support Mail Team with instructions to process the check through manual deposit.

  33. If the payment is submitted on Form 656-PPV, Partial Payment Voucher:

    • Process the payment as described above

    • Indicate on Form 656-PPV the application of the payment

    • Photocopy Form 3244 and Form 656-PPV to be included in the case file

    • Forward the copies of Forms 656-PPV and 3244 to the correct inventory/employee assignment code

    • Forward the original Forms 3244 and 656-PPV with the check to the mail team

    • Document the case history

5.8.3.5.1  (09-23-2008)
Completing the Form 13479, COIC Remittance Tracking Report

  1. The COIC sites must prepare Forms 2515 and 13479.

  2. The checks and Form 2515 will be associated with the applicable Form 13479 and forwarded to the Campus Support Mail Team within 24 hours of receipt.

    Note:

    Deposit guidelines require that all deposits be made with 48 hours of the IRS received date. If there is a delay between the IRS received date and the COIC received date (i.e. a late receipt from a field office), document the AOIC history with the reason for the delay.

  3. A Form 2515 must be generated for each offer listed on the Form 13479, which is used to apply the related checks to the 4710 Account. Each check submitted by the taxpayer will be listed on separate lines of the Form 2515. A copy of all Forms 2515