Rev. Proc. 62-11

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to outline the procedure for the submission and handling of offers in compromise relating to (a) civil and criminal liabilities arising under the Internal Revenue Code of 1954 with respect to alcoholic liquors, tobacco products, cigarette papers and tubes, and firearms; (b) liabilities with respect to administrative forfeiture of personal property seized in connection with liquor, firearms, tobacco, and wagering tax violations; and (c) penalties for violation of the provisions of the Federal Alcohol Administration Act.

SEC. 2. AUTHORITY TO COMPROMISE.

.01 Section 7122 of the Internal Revenue Code of 1954 provides that the Secretary of the Treasury or his delegate may, prior to reference to the Department of Justice for prosecution, compromise civil and criminal cases arising under the internal revenue laws. Section 7 of the Federal Alcohol Administration Act provides authority for the Secretary to compromise liability with respect to penalties for violation of the provisions of the Act.

.02 The Commissioner of Internal Revenue has been delegated authority to compromise cases arising under the internal revenue laws and the Federal Alcohol Administration Act and, to the extent indicated in subsections .03 and .04 of this section, has redelegated such authority with respect to liabilities arising under chapter 51, 52, and 53 of the Internal Revenue Code of 1954 and the Federal Alcohol Administration Act. See Treasury Department Order No. 150-25, dated June 1, 1953.

.03 The Director, Alcohol and Tobacco Tax Division, has been delegated authority to accept or reject offers in compromise of liability with respect to (a) forfeiture of personal property seized in connection with liquor, firearms, tobacco, and wagering tax violations, and (b) penalties for violation of the provisions of the Federal Alcohol Administration Act. See Commissioner Delegation Order No. 31, C.B. 1956-1, 1015.

.04 Assistant Regional Commissioners, Alcohol and Tobacco Tax, have been delegated authority to accept or reject offers in compromise of (a) tax liabilities arising from (1) illegal production of untaxpaid distilled spirits, wines or beer, (2) failure to file returns of, or to pay, occupational taxes with respect to distilled spirits, wines, or beer, and (3) failure to pay firearms taxes arising under Chapter 53 of the Internal Revenue Code; (b) liabilities arising under Chapter 52 of the Internal Revenue Code (tobacco products, cigarette papers, and tubes); and (c) criminal liabilities of retail dealers in liquor arising from violations of the internal revenue laws relating to liquor, including the reuse or refilling of liquor bottles. See Commissioner Delegation Order No. 34, C.B. 1956-2, 1375; Delegation Order No. 61, C.B. 1958-1, 683; and Delegation Order No. 62, C.B. 1958-1, 683.

SEC. 3. OFFERS IN COMPROMISE UNDER INTERNAL REVENUE LAW.

.01 Offers shall be submitted in triplicate on Form 656, Offer in Compromise, properly executed, and should generally be accompanied by a remittance representing the amount of the compromise offer, or a deposit if the offer provides for future installment payments. Checks and money orders should be made payable to the Internal Revenue Service. Personal checks may be accepted except when tendered as final payment on an offer which is contingent on immediate or simultaneous release, in whole or in part, of Federal tax liens. If the offer is based on inability to pay, it shall be accompanied by Form 433 or Form 433-AB, Statement of Financial Condition and Other Information. Offers in compromise may be filed with the District Director of Internal Revenue for the district in which the liability was incurred or the offense committed, or may be initially received by an Alcohol and Tobacco Tax officer for transmittal to the District Director.

.02 The District Director will record each offer in compromise, complete all copies of Form 656, and forward the original and one copy of Form 656 and two copies of his record card, Form 2515, with attached Form 433 or Form 443-AB, if any, to the Assistant Regional Commissioner, Alcohol and Tobacco Tax. An abstract and statement giving a brief summation of the facts and circumstances will be prepared in the Assistant Regional Commissioner's office in accordance with current procedures.

.03 An offer in compromise may be withdrawn by the proponent at any time prior to its acceptance or rejection. When an offer is withdrawn, or is rejected, the amount submitted with the offer, including all installments paid, will be refunded, without interest, unless, in the case of tax liability, the proponent has stated or agreed that the amount submitted may be applied to the liability with respect to which the offer was submitted.

.04 When the Assistant Regional Commissioner accepts an offer (or is notified of acceptance by the National Office), he will notify the proponent, by letter, that his offer has been accepted. The letter will identify the offer by serial number, show the specific violation or tax liability which has been compromised, and include an exact statement of any stipulation or agreement made a part of the offer.

.05 When an offer is rejected, the Assistant Regional Commissioner will prepare a letter advising the proponent that his offer has been rejected and that a check refunding the amount submitted is enclosed. The letter will identify the offer by serial number, show the specific violation or tax liability which the proponent sought to compromise, and state the reasons for rejection. The Assistant Regional Commissioner will forward the letter to the District Director, who will issue a check and mail the check and letter to the proponent.

SEC. 4. OFFERS IN COMPROMISE UNDER THE FEDERAL ALCOHOL ADMINISTRATION ACT.

.01 Violations of the Federal Alcohol Administration Act may be disposed of by acceptance of an offer in compromise, commensurate with the offense (but not in excess of $500 for each offense), in lieu of the administrative or criminal penalties prescribed by the Act. Remittances shall be in the form of a certified check or post office money order made payable to the Director, Alcohol and Tobacco Tax Division, Internal Revenue Service. Offers shall be submitted in duplicate on Form 656-D, offer in Compromise, to the Assistant Regional Commissioner, Alcohol and Tobacco Tax, for the region where the violation occurred. The Assistant Regional Commissioner will consider the offer and, if he finds it to be complete and in proper form, will forward it and the remittance to the Director, Alcohol and Tobacco Tax Division, for final action.

.02 If the offer is accepted, the Director, Alcohol and Tobacco Tax Division, will notify the proponent of such action and furnish the Assistant Regional Commissioner with a copy of the acceptance letter. The letter will identify the offer by serial number, show the specific violation which has been compromised, and include an exact statement of any stipulation or agreement made a part of the offer.

.03 If the offer is rejected, the Director will notify the Assistant Regional Commissioner of such action and return the remittance to him. The Assistant Regional Commissioner will return the remittance to the proponent with a letter stating the reasons for rejection of the offer.

SEC. 5. PUBLIC INSPECTION OF ACCEPTED OFFERS.

.01 A copy of the abstract and statement relating to each offer accepted in compromise of civil or criminal liability arising under chapter 51 of the Internal Revenue Code of 1954 will be available for public inspection, for a period of one year from date of acceptance, in the office of the District Director for the internal revenue district in which the offer was submitted.

.02 A copy of the abstract and statement relating to each offer accepted in compromise of (a) civil or criminal liability arising under chapter 51 of the Code, or (b) penalties for violation of the Federal Alcohol Administration Act, will be available for public inspection, for a period of one year from date of acceptance, in the office of the Assistant Regional Commissioner, Alcohol and Tobacco Tax, for the region in which the offer was submitted.

.03 The abstract and statement will not contain any information which would disclose trade secrets, processes, operations, style or work, or apparatus, or confidential data, amount or source of income, profits, losses, or expenditures, or any other matter within the prohibition of section 1905 of Title 18 of the United States Code on Crimes and Criminal Procedure.

SEC. 6. INQUIRIES.

Inquiries concerning this Revenue Procedure should refer to its number and be addressed to the office of the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax.