Rev. Proc. 66-53

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to make known changes in functional alignment in the National Office and district offices in the processing and disposition of certain offers in compromise, and to supersede and restate in a current document the required form for submitting a financial statement in connection with offers based on inability to pay.

SEC. 2. BACKGROUND.

.01 Revenue Procedure 64-44, C.B. 1964-2, 974, sets forth the jurisdictional alignment pertaining to the consideration and disposition of offers in compromise and outlines procedures established to implement Delegation Order No. 11 (Rev. 3), C.B. 1963-2, 732, authorizing District Directors to accept certain offers to compromise tax liabilities under $100,000 and any offers involving specific penalties.

.02 Revenue Procedure 55-5, C.B. 1955-2, 902, sets forth the requirements for the filing of Forms 433 and 433 AB, both entitled "Statement of Financial Condition and Other Information," in connection with offers in compromise based on inability to pay.

SEC. 3. FUNCTIONAL ALIGNMENT IN DISTRICT OFFICES.

.01 District Collection Divisions will have jurisdiction over the filing, recording and payments relating to all offers in compromise.

.02 District Collection Divisions will also have jurisdictional responsibility for consideration and disposition of the following types of offers in compromise:

(1) Taxes of all classes, except alcohol, tobacco, and firearms, including ad valorem penalties and interest, based on inability to pay;

(2) Ad valorem fraud and negligence penalties, including interest;

(3) Penalties relating to declarations of estimated tax;

(4) 100-percent penalties, are provided by sections 6671 and 6672 of the Internal Revenue Code of 1954, and corresponding sections of the Internal Revenue Code of 1939;

(5) Ad valorem delinquency penalties; and

(6) Specific penalties, except those arising under laws relating to alcohol, tobacco, firearms, and certain narcotic offers.

District Collection Divisions will also have investigative jurisdiction for Chief Counsel cases involving the types of offers in compromise enumerated above. Section 2.03 of Revenue Procedure 64-44, C.B. 1964-2, 974, identifies Chief Counsel cases.

.03 District Audit Divisions will have jurisdictional responsibility for consideration and disposition of offers in compromise based on doubt as to liability for taxes or for both taxes and statutory additions, except alcohol, tobacco, and firearms taxes, including investigative jurisdiction over such offers in compromise in Chief Counsel cases.

SEC. 4. FUNCTIONAL ALIGNMENT IN THE NATIONAL OFFICE.

Management functions and responsibility for review of offers in compromise requiring the Commissioner's approval, processed by district office Audit and Collection Divisions, will be vested in the National Office Audit and Collection Divisions consistent with the functional area having jurisdiction in district offices.

SEC. 5. CONFERENCES AND APPEALS.

Conference and appeal privileges of offerors set forth in Section 6 of Revenue Procedure 64-44, C.B. 1964-2, 974, are not changed in any way as a result of assumption by district office Collection Divisions of jurisdictional responsibilities for consideration and disposition of certain offers in compromise as set forth in Section 3 of this Revenue Procedure.

SEC. 6. STATEMENT OF FINANCIAL CONDITION.

All taxpayers seeking to compromise an unpaid liability on the grounds of inability to pay the total amount due will be required to file with the offer in compromise a Form 433, Statement of Financial Condition and Other Information, regardless of the type of tax or amount of liability involved.

SEC. 7. EFFECT ON OTHER DOCUMENTS.

.01 Revenue Procedure 64-44, C.B. 1964-2, 974, is amended to reflect changes in functional alignment in the National Office and district offices with respect to processing and disposition of certain offers in compromise.

.02 Revenue Procedure 55-5, C.B. 1955-2, 902, is superseded.

SEC. 8. EFFECTIVE DATE.

This Revenue Procedure is effective January 3, 1967.