5.8.2. Centralized Offer in Compromise Initial Processing and Processability

(1) Purpose -This IRM section provides instructions for initial case processing of offer in compromise receipts.

(2) Audience -The primary users of this IRM are offer in compromise employees who are responsible for initial case processing of offer in compromise receipts. It also provides information to other collection employees when considering an offer in compromise as a collection alternative.

(3) Policy Owner - Director, Collection Policy, SB/SE.

(4) Program Owner - Collection Policy, SBSE, Offer in Compromise (OIC) Program is the program owner.

(5) Primary Stakeholders - The primary stakeholders are OIC process examiners.

(6) Program Goal - Policy Statement P-5-100 explains the objectives of the OIC as a collection tool. By following the processes and procedures in this IRM, employees will be able to accurately and timely complete initial processing of OIC receipts.

(1) Integrated Automation Technologies (IAT) tools must be used whenever possible. The use of the COIC IAT tool is now mandatory. Employees will use OIC-IAT to conduct and record the research of account conditions, filing compliance, payment compliance, and payment searches. The OIC IAT tool will replace much of the manual research currently being conducted via multiple IDRS command codes. See IAT Job Aids, for a list of IAT tool job aids to assist you in your research. Additional OIC IAT job aides are located on IAT Job Aids (sharepoint.com).

(2) When a mandated IAT tool is not used because it was not available or determined not to be appropriate due to a specific situation, document AOIC Remarks with the corresponding reason. In these situations, complete case processing through IDRS following established procedures.

(3) After verifying compliance with estimated tax payments, federal tax deposits and filing requirements, if there is a year(s) where the taxpayer was not required to file or pay, you must annotate AOIC remarks with the reason why and input the TC 590 to close the filing requirement using the IAT tool.

(4) Secure Messaging is a web-based system that allows SCOIC employees a convenient way to communicate, send, and receive documentation from taxpayers/representatives. It allows the IRS and the taxpayer/representative to share messages and supporting documents through a digitally secure portal, reducing the need for phone calls and mailing documents. Throughout the IRM there are references to acceptable means of receiving information from taxpayers/representatives including correspondence through mail and fax. Secure Messaging is now available as another option for taxpayers/representatives, allowing them to submit requested information online quickly and securely in lieu of mailing correspondence during an offer investigation.

(5) Document Upload Tool (DUT) is another option that allows taxpayers or their representatives to upload documents instead of mailing them to the IRS. Unlike Secure Messaging, DUT is a one-way communication and is often used by the taxpayer or their representative to send correspondence to the IRS. You are encouraged to use these electronic systems as a way to communicate with the taxpayer.

(1) When an offer is received in the Centralized Offer in Compromise (COIC) site, date stamp the Form 656, Offer in Compromise, in the IRS Received Date Stamp block.

(2) The 24-month TIPRA statute date does not start until the offer is received in the COIC site. The PE will enter the COIC site received date in the IRS received date field on AOIC. If an offer was received in an IRS location other than COIC, document AOIC Remarks with the location and date where it was received.

(3) When manually loading TC 480s to IDRS, input the SC 19 for Brookhaven and 49 for Memphis. This will identify which campus is responsible for manually closing the TC 48X.

(4) The Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) was signed into law on May 17, 2006. See IRM 5.8.1.13, The Tax Increase Prevention and Reconciliation Act of 2005 for additional information.

(5) The law stipulates that, in addition to the application fee, an Offer in Compromise (OIC) received on or after July 16, 2006, must include one of the following based on the offer terms.

1. Lump Sum Offer – The submission of any lump sum OIC shall be accompanied by 20% of the amount of the offer or the low-income certification box checked on Form 656. As a matter of policy, the term "lump sum" means any offer of payments made in 5 or fewer installments within five months of offer acceptance, unless an exception as noted in IRM 5.8.1 under Payments exists. Enter a "C" (Cash) on the Automated Offer in Compromise (AOIC) "Terms" screen if the payments will be made in 5 or fewer months.

2. Periodic Payment – The submission of any periodic payment OIC shall be accompanied by the amount of the first proposed installment, or the low-income certification box checked on Form 656. As a matter of policy, the term "periodic payment" means any offer of payments to be made in 6 to 24 months. Enter a "D" (Deferred) on the AOIC Terms screen.

(6) 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, except for some situations, and should be 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. Effective with the Form 656 revision on 4/2022, deposits are no longer accepted. If the taxpayer submits a deposit, draw a diagonal line across the check and write “Return” across the check and send back to the taxpayer with the return letter. Application fees may not be designated but may be refundable, in certain situations.

(7) Because a taxpayer may not specify how the application fee for processing an offer in compromise will be applied, the IRS will apply the application fee in the best interest of the government. See IRM 5.8.2.8.1, Processable Offers - Payment Processing.

(8) If COIC gets a new offer that was originally received in another IRS office, and none of the required payments are attached, research IDRS for recent payments corresponding to the required offer amounts. If found, consider the corresponding recent payments dated on or after the date the offer was received as meeting offer payment submission requirements. Load the payments on the AOIC Payment screen and, if necessary, update DPC codes.

(9) Sort in the following categories:

• Offers submitted with remittance

• Offers submitted without remittance

• Out of jurisdiction transfers

(10) Verify the jurisdiction of the offer.

(11) COIC interoffice transfers based upon state mapping are no longer necessary.

(12) Research Integrated Data Retrieval System (IDRS) for entity verification, bankruptcy, cross reference Taxpayer Identification Numbers (TINs), and freeze codes. Research ACDS for any open CDP. Record TINs of any related or closely held entities as cross reference TINs in AOIC and where you located the TIN (such as IDRS command code, 433-A(OIC), 433-B(OIC) etc.).

(13) Print the first page of Individual Master File Online Tax definer 'T' (IMFOLT) and Business Master File Online Tax definer ‘T’ (BMFOLT), as applicable, and include in every case file. These prints are necessary to aid the OE/OS for the CSED dates.

(14) Complete the following actions on AOIC:

• Query AOIC to ensure the receipt is a new offer

  Note: If there is an existing offer for the same taxpayer TIN, additional research will be required, forward any correspondence received with the offer to the OE/OS.

• Only add new offers to AOIC, be sure to annotate the AOIC remarks section with the revision of the Form 656, Offer in Compromise, and the date it was signed by the taxpayer.

• Load entity information with the social security number (SSN), Employer Identification Number (EIN) or Individual Taxpayer Identification Number (ITIN), and name control only

• If the offer is processable, then update the offer type (DATC, ETA, NEH-ETA) based on the reason for offer selected on the Form 656. If the taxpayer checks more than one box or doesn't mark any box, load as DATC and annotate the remarks on AOIC.

• Initiate Data Download

• If Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization, is included with the offer, review the form to ensure it includes required essential elements for validity as listed in IRM 21.3.7.5.1, Essential Elements for Form 2848 and Form 8821. Generally, an authorized representative is authorized to receive any notice or other written communication required or permitted to be given to the taxpayer in the matter concerning the taxpayer, regardless if the box on the Form 2848 is checked or not. See IRM 5.1.23.4.2.3, Written Communication to a Taxpayer’s Authorized Representative/Send notices to the representative regardless if the box is checked on the Form 8821. See IRM 5.1.23.4.3.1, Form 8821 Considerations.

• If valid power of attorney (POA) information is found on Centralized Authorization File (CAF) via cc CFINK or provided with the offer, load the information on the AOIC POA screen. If multiple POAs are provided, load up to two on the AOIC POA screen. Update AOIC Remarks with the representative information for any valid Powers of Attorney not loaded on the AOIC POA screen.

  Note: If multiple POAs are listed on the drop-down menu, research IDRS for matching information and load up to two POAs with authority for all offer tax periods. Load the individual POA name. Do not load the company name. Form 2848, Power of Attorney and Declaration of Representative, takes precedence over Form 8821, Tax Information Authorization, when both are valid.

• Forms 2848/8821 (supplied with Form 656) must be loaded on AOIC POA screen, only if they are authorized for all years and forms for the offer. Only check the box on AOIC POA screen to receive notices if the POA is authorized for all periods and forms. Clearly annotate AOIC remarks with the tax years and forms the POA is authorized for to avoid unauthorized disclosure.

• Update the pre-qualifier tool field to "Y" when the taxpayer indicates the pre-qualifier tool was used prior to submitting the offer.

• Complete the "Update Processability" function of AOIC.

  Note: Multiple offers submitted with one remittance intended as the application fee(s) and/or payment(s) for all will be processed. Load the offers to the AOIC system. Clearly annotate AOIC remarks for each offer and update the payment screen and the remarks with the check number, check type and amount of the check for an accurate audit trail.

(15) Review Form 656, Section 1, to see if the taxpayer checked yes in the boxes next to (i) Is this a new address and/or (ii) would you like us to update our records to this address, if both are checked as yes, change the address on IDRS. If the taxpayer only checked one of the boxes as yes, the PE should contact the taxpayer to confirm the correct address and secure permission to update the address on IDRS before making any changes to the address on IDRS. Refer to IRM 3.13.5.29 Oral Statement/Telephone Contact Address Change Requirements

(16) If research indicates the taxpayer has an accepted offer, and the Service Center status code on AOIC is other than C(X)(closed), do not load the offer see IRM 5.19.7.1.6 (2), Terms/Definitions/Acronyms. Return the offer and the application fee to the taxpayer. If the offer is still open and the taxpayer is still paying on their accepted offer, apply the TIPRA payment as a DPC 09. If the offer is full paid, return all monies back to the taxpayer. If the prior accepted offer is in status C(X), load the offer and process following established guidelines.

(17) Follow procedures in IRM 5.8.2.4.1, Determining Processability, below to make a processability determination and IRM 5.8.2.8.1, Processable Offers - Payment Processing and IRM 5.8.2.9, Sorts and Payment Processing, for processing application fees and payments.

(1) COIC Process Examiners (PEs) are responsible for determining processability on offers received and worked by the IRS; including TFRP/PLET DATL offers. All other DATL offers are processed in Brookhaven COIC. (see IRM 5.8.2.3, above).

(2) If the offer is received with payment, processability must be made within 24-hours of IRS received date. Case building must then be completed within 20 calendar days of AO received date.

(3) If no payment is submitted, and the low-income certification boxes on Form 656, Offer in Compromise, are checked, processability and case building must both be completed within 20 calendar days of AO received date. Update the processability code to ‘U’, Undetermined, on offers for which processability will not be completed within 24-hours.

(4) If the taxpayer/POA provides a thumb drive with their offer, return the thumb drive it to the taxpayer . If the taxpayer has a large file, request they use DUT and SM to send electronically. -

(5) Each new receipt will fall into one of the following categories:

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

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

(1) When returning the offer as not processable do not sign the offer.

• The IRS must return the application fee and the TIPRA payment in situations listed in, IRM 5.8.2.4.1 (1) A through E, Determining Processability.

• In all other instances, apply the TIPRA payment to the earliest CSED.

(2) Checks must be stamped “Return” within 24-hours of receipt.

(3) Take the following actions:

1. Complete the AOIC Payment screen as applicable.

2. Stamp Form 656, Offer in Compromise, with "RETURN" and write the date that the offer was determined to be not processable.

3. Cross out all IRS received dates with an “X.”

4. Document the AOIC Remarks with the payment information, specifying the reason(s) for the not processable determination.

5. If the offer is not processable due to required unfiled tax returns and the taxpayer submitted one check for the application fee and TIPRA payment, the check must be deposited to apply the TIPRA payment to the taxpayer’s account using DPC 34 and a manual refund completed to refund the application fee, if applicable.

   Note: If there is an indication from the taxpayer that the one check received with the offer submission was intended to cover the application fee and the TIPRA payment, but the check is for an amount less than the application fee, return the entire amount of the check to the taxpayer.

6. If the payment(s) was processed through EFTPS or the Remittance Strategy for Paper Check Conversion (RS-PCC), prepare the Form 5792, Request for IDRS Generated Refund (IGR), for a manual refund only after the money has posted to IDRS. If the payment was dishonored, annotate the remarks on AOIC and no further action is necessary.

   Note: The Form 5792, Request for IDRS Generated Refund (IGR), on not processable offers will be processed according to normal manual refund procedures outlined in IRM 21.4.4, Manual Refunds.

(4) Prepare the return letter.

1. In addition to identifying the reason(s) for the determination, also address any issues concerning combined joint and separate liabilities, if appropriate; for example, individual and corporate or partnership liabilities on one Form 656, Offer in Compromise. In those cases, include option "AF" in the return letter.

2. Ensure signature on the return letter as defined in Delegation Order 5-1, per IRM 1.2.2.6.1, Delegation Order 5-1 (Rev, 5), To Accept, Reject, Return, Terminate or Acknowledge Withdrawals of Offers in Compromise.

3. Close AOIC with a final disposition code of 10.

4. Send Form 656, Offer in Compromise, the return letter, Pub 1, Your Rights as a Taxpayer, and Pub 594, The IRS Collection Process, to the taxpayer with all original documents submitted with the offer. If a 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.

5. Clear the AOIC letters and forms after they are generated. The AOIC remarks are populated with form/letter information on the date it is cleared, not the date it is generated.

   Note: Failure to clear the forms and letters timely will make it appear they were issued days or weeks after the fact.

(5) If the Form 656, Offer in Compromise, was forwarded by a Revenue Officer (RO) with a Form 657, Revenue Officer Report, and it is determined to be not processable, the COIC site should forward Form 657 and a copy of the not processable letter to the RO or approving official of Form 657. If Form 656 was forwarded by a revenue officer without Form 657, research IDRS for ST 26 to locate the RO number and forward a copy of the return letter to the RO assigned the collection case for informational purposes. See IRM 5.19.1.3.2.4, Revenue Officer (RO) Assignment on how to look up the RO by TSIGN/ZIP/STATE.

(6) Caution should be exercised to ensure that no IDRS prints, or other internally generated research documents are sent to either the taxpayer or the POA. All internal documents should be destroyed.

(1) The following procedures apply if the application fee and payment(s) were made with certified funds (money order, bank check, cashier’s check, government check), and 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.

• 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.

• The Form 3210, Document Transmittal, must be completed by annotating "$xxx amount Certified" to indicate the application fee and/or deposit payment(s) were returned via certified funds to the taxpayer.

  Note: TIPRA payments will be refunded when meeting the criteria in IRM 5.8.2.4.1 (1) (a-e) above.

(2) The following procedures will only apply if processability cannot be completed within 24-hours of receipt of the application fee was made with certified funds (money order, bank check, cashier’s check, government check).

• Certified funds will be deposited upon receipt and processed through the normal work stream for both the clerical and PE procedures.

• Request a manual refund of the application fee by preparing the Form 5792, Request for IDRS Generated Refund (IGR), only after the funds have cleared.

  Note: Form 5792 manual refunds on not processable offers will be processed according to normal manual refund procedures outlined in IRM 21.4.4, Manual Refunds.

  Note: TIPRA payments will be refunded when meeting the criteria in IRM 5.8.2.4.1 (1) (a-e) above.

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

(3) The following procedures will only apply if processability cannot be completed within 24-hours of receipt of the application fee and the payment(s) was made with a personal check.

1. Complete a separate Form 3210, Document Transmittal, for those offers to be returned based on the receipt of only the application fee.

2. Enter no more than 5 offers on the Form 3210, Document Transmittal.

3. Load onto AOIC.

4. Hand-carry the Form 3210, Document Transmittal, to the Campus Support Mail Team to get personal checks stamped as “Return”.

   Note: COIC will use a “Return” stamp on personal checks when the taxpayer's offer is deemed not processable. The Form 3210 will be issued for control purposes only and should be maintained as a record of the payment(s) received. The Form 3210 must also indicate the check(s) was stamped as “Return” and the date it was stamped.

5. Personal checks stamped “Return” will be returned to the designated COIC function employee housed in the Campus Support mail area and maintained in a locked file until the completion of the return package.

6. Personal checks stamped “Return” and the offer package should be returned to the taxpayer through normal mail-out procedures.

7. The AOIC history must be documented indicating the check was stamped “Return” and include the date it was stamped.

   Note: Once the checks have been stamped “Return” 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.

(4) Management must establish controls to ensure returned offer packages are associated with the “Return” payment instruments and processed in accordance with established procedures.

(5) Effective 4/2022, the Form 656 will not allow deposits. If the taxpayer submitted a deposit and the offer is processable or not processable, the deposit must be returned to the taxpayer., Write “Return” across the check and return to the taxpayer.

(1) The IRS retains the application fee for processable offers. Except as provided in 26 CFR section 300.3(b)(2), as a general rule the application fee will not be refunded to the taxpayer when an offer is returned as not-processable after acceptance for processing.

(2) If it is determined that the taxpayer was in bankruptcy at the time the offer was received, to avoid violation of the automatic stay in bankruptcy, the application fee and TIPRA payment(s) must be refunded to the taxpayer.

(3) If the offer was originally determined processable, but it was later concluded that this determination was made in error, processing should stop. The case should be closed as a not processable return. In these cases, it is important to ensure AOIC is updated to "not processable" to reverse the TC 480(s). This will result in the generation of a TC 483 posting to the appropriate modules. If the TC 480 was manually input, the TC 483 must be manually input as well.

(4) When the erroneous processability determination is corrected, prepare the return letter and correct the AOIC Payment screen record and follow IRM 5.8.2.6, Not Processable Offers Received with Payments, above, for refund procedures, if applicable.

(5) If the offer is not processable because a tax year has been referred to DOJ, and the application fee and TIPRA payment were applied to the taxpayer’s assessed liability, contact area counsel via My SBSE Counsel State Mapping so it can supplement its suit letter to DOJ.

(1) Complete the AOIC Payment screen and generate Form 3244, Payment Posting Voucher, as appropriate.

(2) The application fee and all payments received with the processable offer will be applied to the taxpayer’s liability.

(3) Effective 4/2022, the Form 656 no longer accepts deposits, if the taxpayer sends in a check clearly marked as a deposit, write “return” across the check and return to the taxpayer.

(4) Taxpayers may designate voluntary payments while the offer is under consideration. The specification must be made in writing when the payment is made and must include a specific period(s) or type of liability i.e., income tax. The taxpayer may not designate the application fee.

(5) If a business taxpayer submits a payment with a blanket designation to “trust taxes,” without also supplying a specific tax period(s), this is not a specific designation. If you receive a check that contains this instruction and no employment tax period specified, apply the check to earliest CSED employment tax period (usually MFT 01) using DPC 02. Document the designation in the AOIC remarks. Include an open paragraph in the Combo letter that states: Payments annotated only “trust fund” without a specific tax period will be applied to employment tax periods. To designate a payment, you must supply the tax period(s).

(6) Complete the proposed Terms screen on AOIC as stated on Form 656, Enter a “C” for lump sum and a “D” for periodic payments and enter exactly as listed in the Form 656.

(7) Verify Master File Tax (MFT) screens are populated through Data Download or manually input all required information. If the taxpayer did not include a tax period with an outstanding liability on the original Form 656 and the entity is the same, add the periods to the AOIC MFT screen. If the taxpayer has a separate entity (such as a corporation, LLC (after 2009) or partnership) that was not included on the original Form 656, the PE will no longer be responsible for loading those periods on the AOIC MFT screen until such time the OE/OS secures the amended and associated Form 656. See chart below for additional information:

Item	If the taxpayer	Then
1	Does not include all Form 1040 Liabilities	Pen and ink the F656 and add it to the MFT screen. When making pen and ink changes to the Form 656, the OE, OS or PE must initial and date each change on the form.
2	Has Form 2290 liabilities (x-ref. on INOLE)	Add to the MFT screen
3	Has a sole prop. (x-ref. on INOLE)	Add to the MFT screen
4	Has an LLC prior to January 1, 2009	Add to the MFT screen
5	Has a business which is not x-ref. on INOLE (CORP., Partnership or LLC after January 1, 2009).	Do NOT add to the MFT

1. When manually adding tax periods to the AOIC MFT screen include: MFT 35 and/or mirrored MFT 65, Shared Responsibility Payment liabilities assessed under IRC 5000A, Individual Shared Responsibility Payment as well as MFT 74, the penalty for late filing of Form 5500, Annual Return/Report of Employee Benefit Plan, and MFT 76, excise tax based on noncompliance with various statutes relating to employee benefit plans. See IRM 5.8.10.16.2, Processing of MFT 74 and MFT 76 Modules, regarding Assessments Related to Employee Benefit Plans - MFT 74 and 76. The uploaded MFT 74 and MFT 76 transactions will appear as errors on the AOIC Transaction Listing and must be corrected through manual posting of TC 480 and updating the module to status 71.

2. When loading SRP MFT 35 liabilities and the filing status is “0” and it is a joint offer, load as “B”. Even though there is no filing status, it is still considered a joint liability if the MFT 30 was jointly filed. There is no requirement for a separate offer unless the taxpayers have both individual and joint liabilities.

Note: Manually input all TC 480s, as well as closing TCs, for these modules. Do not input a STAUP on IDRS, as the status of the modules cannot be updated to 71 or any other status

3. When loading MFT 31 liabilities on a joint offer; load all liability amounts under the primary SSN modules and load the secondary SSN modules with zero liability amounts. This will avoid inflating the total liability amount.

Note: See IRM 21.6.8.4.2, Mirrored Module Overview, for account conditions that cannot be mirrored.

4. When loading Non-Master File (NMF) periods, the TC 480 will not systemically upload for NMF periods. NMF assessments post under SSN+N. NMF are maintained on a separate system, ANMF. Requests for TC 480 must be submitted to the ANMF Unit but require attachment of a NMF transcript. Send the request for ANMF transcript(s) to *wi.kcspc.nonmaster.file.team@irs.gov, and specify the periods needed. Keep a copy of the ANMF transcripts with the case file. When updating the remarks on AOIC with actions taken, do not use names in the remarks. Simply state manager, analyst, RO etc. Upon receipt for each module, send a Form 3177, Notice of Action for Entry on Master File. (with the attached ANMF transcript) to the *wi.kcspc.nonmaster.file.team@irs.gov. Per IRM 5.8.3.7(2) Note, and IRM 5.8.7.7.3(1)(f), write TC in red directly after the offer number on the outside of the case file and document the AOIC remarks to identify the need for a manual reversal. To alert MOIC that the file includes NMF periods, clearly mark the outside of the case file NMF with a large red marker. Document the closing remarks regarding the NMF so MOIC knows the manual TC reversal request to ANMF are required.

(8) When the need for mirroring is identified, place a prominent red “M” directly after the OIC number on the case file. This could be caused by one spouse submitting an offer separately; one spouse appealing an offer rejection; or submission of separate offers by the spouses with different waiver dates for joint period(s).

(9) On all Individual Master File (IMF) cases enter "P" if the offer is for the primary taxpayer of the controlling TIN on the entity, enter "S" if the offer is for the secondary taxpayer, or "B" if both spouses are filing a joint offer. 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.

(10) Research IDRS and notate AOIC remarks regarding any freeze codes such as: -Y (offer in compromise), -W (litigation), -Z (Criminal Investigation), -A (duplicate return), -V (bankruptcy), -L (Administrative Information Management Strategy, (AIMS)), F- (frivolous return), -E (tax shelter/rollback) as well as TC 520 (Litigation) and TC 971/065 (Innocent Spouse) as these may require special action. Freeze codes indicating Criminal Investigation Division (CID), bankruptcy, Exam issues (i.e., AIMS), duplicate return filed, innocent spouse claims, or other litigations should be worked in accordance with guidelines in this IRM.

(11) Research cc INOLE for any cross-reference SSN, Employee Identification Number (EIN), and Individual Taxpayer Identification Numbers (ITINs) belonging to the taxpayer who submitted the offer. Input the cross reference TIN on the MFT Data Download if liabilities exist for the taxpayer who submitted the offer (This includes any Sole-Prop or 2290 filing requirements) If the cross-reference TIN is listed on the Form 656, but does not cross reference to the SSN, then annotate AOIC remarks with the TIN. Load the TIN as a cross reference only.

(12) Verify the taxpayer has submitted the appropriate Form 656, Offer in Compromise, Form 433-A (OIC), Collection Information Statement for Wage Earners and Self-Employed Individuals, and/or Form 433-B (OIC), Collection Information Statement for Businesses.

(13) Verify the taxpayer has submitted the application fee, required TIPRA payment, or checked the box on Form 656 for the low-income certification for each offer submitted.

(14) Document the AOIC Remarks.

(1) The “If and Then” table below provides the criteria for processing payments: All payments should be clearly annotated in the AOIC remarks screen as well as the payment screen.

(2) PEs must document the remarks on AOIC with the type of check (PC = Personal Check, MO = Money Order, CC= Cashier’s Check, BC= Bank Check), the check number and clearly annotate if the taxpayer meets Low Income criteria and how you verified, they met LI criteria. Any funds that came in as a deposit must be clearly annotated on AOIC remarks with the check type, check number and the date it was returned to the taxpayer stamped “Return”.

(1) An unassessed liability is a liability where no assessment has been made.

(2) If an offer is received that is solely for an unassessed liability(ies), COIC will determine processability using the following procedures.

(1) Form 5792, Request for IDRS Generated Refund, will be forwarded to COIC after processability determinations have been made.

(2) Form 3210, Document Transmittal, will be returned to COIC for processing of all attached Form 3244, Payment Posting Voucher. All completed Form 3210 will be filed and retained in COIC for three years.

(3) If the offer was determined to be not processable and payments were processed through PCC, forward the related Form 5792, Request for IDRS Generated Refund, to MOIC for processing with a copy of the Form 3210. The Form 3210 serves as the transfer transmittal.

(4) Not processable offers (with the exception of offers returned because only the application fee was submitted with a personal check, not processable offers submitted solely for unassessed liabilities and offers submitted solely for a liability(ies) with an expired CSED(s)) will be returned to the clerical function with the associated Form 3210, and Form 5792. The PE will prepare the return letter and envelope for mail out. The following actions must be taken:

• Date and sign the return letter

• Include with the letter any other associated documents

• Seal the envelope for mail out

• Close with final disposition 10 on AOIC Include the Form 656 , Offer in Compromise

• Return to the clerical function to be mailed

(5) If the offer was determined to be processable and the payments processed through PCC, forward the related Form 2515 to MOIC for processing with a copy of the Form 3210. The Form 3210 serves as the transfer transmittal.

(6) The COIC sites will retain processable offers for further OIC processing and assignment.

(1) If Collection files a Notice of Federal Tax Lien (NFTL) or serves a notice of intent to levy, and the taxpayer files a Collection Due Process (CDP) request in response, the taxpayer's offer in compromise falls under the jurisdiction of Appeals while the CDP is open.

(2) If the CDP is open (identified by a TC 520 cc 76/77 or TC 971 action code 275) change the case category code to 10.

(3) The same processability criteria will be applied to these cases.

(4) Payment processing should be through RS-PCC or PCC as appropriate.

(5) Appeals will provide COIC with the processable determination letter containing all necessary information, including the Appeals contact information on Appeals Transmittal Form 3210, Document Transmittal. Appeals will provide two copies of the Appeals Transmittal Form 3210. One copy is for COIC clerical filing. and the other copy will remain with Form 656, Offer in Compromise, and related documents. It is the responsibility of COIC to sign, date, and mail the applicable letter based on the processability determination.

(6) See the below chart if the CDP condition is identified after processability has been completed.

(7) It will be the responsibility of Appeals to resolve each TC 480 (e.g., input of TC 481, 482, 483) after Appeals makes a final determination.

(1) If the offer is determined to be processable, it may be necessary to change the status code to 71.

(2) If tax periods are in status 53, 61, 63, 72 or if the Form 657, Offer In Compromise/Revenue Officer Report, indicates that Tax Delinquent Accounts (TDAs) are to remain in the field, remove the "Y" on each tax period on the MFT screen. Only change to status 71 if the account is in Status 53 with Closing Code 03 (unable to locate) or Closing Code 12 (unable to contact).

(3) Offers in status 60 (installment agreement) – for offers with a status of 60 the indicator should be changed to Status 71. PE are to print IADIS for each TIN (if joint offer and each have their own IA) and place in the IDRS tab in the file folder prior to changing to ST 71. If the offer cannot be accepted, the installment agreement should be reinstated. In those cases, the reinstatement fee for the IA will be waived.

(4) If any periods are within 6 months of expiration, the status code cannot be updated in IDRS. This applies to changes both from and to status 71. The TC 480 will suspend the CSED until the offer investigation is complete. Revenue officers may find additional information in IRM 5.1.19.5.4, Expiration of a Collection Statute

(5) If a return is submitted with the offer, and it is for an SFR assessment (TC 150 SFR) input Status 71 to suppress notices.

(1) Related offers and any corresponding payments received for loading onto the AOIC system should be processed following current procedures as soon as possible.

(2) When you receive a related offer, make sure you read the remarks in AOIC and review the MFT screen prior to loading the offer. You need to be aware of what waiver dates you should be using. If the period(s) were on the original offer, then the waiver dates should remain the same on the related offer. If you are loading new period(s), then the waiver date would be the IRS received date you received the related offer.

(3) When you receive a related offer and (1) it is for the same period(s) as the original offer and (2) it was split due to only one taxpayer having an open CDP and the other taxpayer does not, make sure the waiver and IRS received dates are the same as the original offer.

(4) All related offers received via E-fax, secure message, DUT, or any other electronic submission, need to be loaded within 5 business days of receipt.

(5) If the related offer was received from an OIC field offer specialist take the following actions:

• Load the related offer onto AOIC.

• Complete processability.

• Update the original offer as applicable.

• Prior to loading the TC 480’s, the PE must print all IMFOLT/BMFOLT prints for the OS so they can calculate the CSED. Once the offer is loaded on AOIC, the PE manager will verify all OIC periods are on the correct MFT screen and appropriate codes (TC 480’s and statute expirations) are input for both offers. If any tax periods cannot be on the AOIC MFT screen or the appropriate codes are not input in IDRS for both offers, then the remarks screen must be documented with information on any additional actions required by the OE/OS.

• Transfer the offer to the appropriate AO.

• E-mail the OS and GM to advise the Form 656 has been processed and is ready for transfer acceptance in the area. Include the new and related offer numbers in the e-mail.

  Note: If email or E-fax is available, use one of these methods to notify the OS.

• Mail or e-Fax the Form 656 (and any attachments including all IMFOLT/BMFOLT prints) directly to the OS using Form 3210.

(6) If the related offer was received from Appeals take the following actions:

• Load the related offer onto AOIC.

• Complete processability.

• Update the original offer as applicable.

• Once the offer is loaded on AOIC, the PE manager will verify all OIC periods are on the correct MFT screen and appropriate codes (TC 480s , assessed dates and statute expirations) are input for both offers. If any tax periods cannot be on the AOIC MFT screen or the appropriate codes are not input in IDRS for both offers, then the remarks screen must be documented with information on any additional actions required by the settlement officers (SO).

• If the original offer was worked in COIC assign the offer to the Offer Examiner that worked the original offer.

• If the original offer was worked in a field office: 1) Transfer the offer on AOIC to the AO where the original offer is controlled. 2) Send an e-mail with the offer number to the Appeals Officer and the group manager. 3) Return the 656 (and any attachments) directly to the Appeals Officer. DO NOT send any documents to the field.