May 13, 2011

Control No.: SBSE-05-0511-026

Expires: May 13, 2012

Impacted: IRM 5.8

MEMORANDUM FOR DIRECTORS, COLLECTION AREA OPERATIONS
(CALIFORNIA, GULF STATES, AND SOUTH ATLANTIC)
DIRECTORS, CAMPUS COMPLIANCE OPERATIONS
(BROOKHAVEN AND MEMPHIS)

FROM:
Scott D. Reisher
Director,
Collection Policy

SUBJECT:
Centralized Offer in Compromise Streamline Offer Processes

• Processability will be conducted following established IRM 5.8 guidelines

• Field transfer cases will be case built following procedures outlined in IRM 5.8.3.4
• Offers will be screened for the "Screen for Obvious Full Pay" process
• Cases requiring a related offer will be case built following established guidelines.

• Taxpayer is a wage earner or self employed individual, with gross receipts of $500,000 or less with no employees

• Total liability is less than $50,000, including accruals. Research should be conducted to determine if all liabilities and entities are included in the total balance due. (QUERY SCREEN)

• Total household income is $100,000 or less. Form 433A, line 32 must be $8,333 or less.
• Complete internal case building only; IDRS
• Do not review offer for missing documentation or critical perfection of F 656.

• BCOIC will use a Yellow Folder to identify streamline cases and MCOIC will use an Orange Folder.
• Send the taxpayer a Combo "A" letter. Include Pubs 1 and 594 with taxpayer's letter.
• Assign to 6400 Wage OE or 6450 Self-Employed OE cases.
• The OE will complete critical perfection of the Form 656. (i.e. physical address, offer amount)

• If the taxpayer is not in filing compliance and/or there is a shortfall of the 20% TIPRA lump sum payment:
• Send a Combo letter to the taxpayer for unfiled tax returns and/or additional payment. (Do not review the Form 433A for any other missing information)
• If the POA is not authorized to represent the taxpayer on all periods, include the applicable paragraph.
• Assign wage earner cases to 4000 and self employed cases to 4050.
• Use the appropriate Yellow or Orange folder, based on the processing site.
• If no response, return the offer under current IRM 5.8 procedures

• If there is no Form 433A, Form 433A is blank, or the taxpayer submits only the Form 433B:
• Send a Combo letter requesting the Form 433A. If taxpayer is not in filing compliance and/or there is a TIPRA 20% lump sum shortfall, also address these issues in the Combo.

• Mark the outside of the folder, "433A"
• Assign the case to 5100 or 5158, as appropriate.
• When the response is reviewed, check for Streamline Criteria (Total Annual Income $100,000 or less).
• If the offer meets streamline criteria, update AOIC to the applicable OCC, assign to 6400 or 6450, as appropriate, and put in the appropriate Yellow or Orange folder.
• If offer does not meet streamline criteria, continue with regular case processing.

• Financial information will be loaded to Decision Point (DP) utilizing the dollar amounts the taxpayer supplied on the Form 433A and/or 433B.
• Internal research and/or documentation submitted with the offer will be reviewed to determine if these amounts are reasonable.
• The figures provided by the taxpayer should only be questioned and adjusted in the AET or IET analysis if there are significant discrepancies.
• Any request for additional information will be made through phone contact and request for fax responses, when possible.
• Follow IRM 5.8 guidelines for allowable standards and expenses.

• Verify the taxpayer provided information through internal research.
• The use of oral testimony may be allowed and should be well documented, unless the information appears questionable.
• Complete internal record checks to determine ownership and equity in real and personal property, including motor vehicles.
• Low Income Waiver -- Low Income Waivers will be considered valid if the taxpayer meets the low income guidelines as defined on the Form 656 at the time of submission or current income, whichever is less. The taxpayer may provide the information on the Form 656-A, Income Certification for Offer in Compromise Application Fee (For Individual Taxpayer Only), or by checking the box in Section 4 on the Form 656 (Revised 3-2011).
  

Streamline Financial Analysis

• Income reported by the taxpayer on the Form 433A and/or 433B will be used for the Income Expense Table (IET) unless a significant discrepancy is identified through pay stubs or internal research. This same income will be used when validating the Form 656-A.
• # * * * # * * * # * * * # * * * # * * *
• # * * *
• # * * *
• # * * * # * * * # * * # * * * # * * * # * * * # * * * # * * *

• Offers worked under streamline processing are not subject to initial analysis and follow-up actions defined in IRM 5.8.4.7, Initial Offer Actions.
• Offers will be worked as expeditiously as possible with no unwarranted delays.

• Any request for additional information and/or communicating the preliminary findings of the offer evaluation will be made by phone, to the greatest extent possible. If additional information is required, all due consideration should be given in accepting oral testimony. When calling to share preliminary findings, clearly explain how the determination was made. Ask the taxpayer if there is anything further that should be considered and whether there may be special circumstances that were not conveyed in the original offer submission.
• Three phone attempts must be made at different times of the day over two business days. If you are able to leave a message on an identified VMS, request a call back within two business days. This is considered a successful call.
• If you are not able to reach the taxpayer/POA by phone within two business days or the taxpayer/POA does not return your call, send a quick note requesting a call back within ten calendar days of the date of your letter.
• Phone contacts and attempted contacts must be documented in the case history.
  

Appropriate Use of Additional Information Letters

• Additional information letters will NOT be used to secure financial verification. They may be used for the following requests only after three unsuccessful phone attempts:

• Cases should be returned for appropriate reasons, following established guidelines (compliance issues, failure to provide information considered necessary for case development, etc.).

• Call the taxpayer to discuss the determination. Three attempts, within two business days, should be made.
• If phone contact cannot be made, send a quick note.
• Identify the reason for the full pay determination and discuss with the taxpayer to see if there is additional information/special circumstances that would change the determination. Update AET/IET as needed.
• If there is no change to the determination, send to the IAR and issue the rejection letter. Follow rejection procedures in IRM 5.8.7, Offer in Compromise -- Return, Terminate, Withdraw and Reject Processing.

• Call the taxpayer to discuss the case decision. Three attempts, within two business days, should be made.
• If phone contact cannot be made, send the quick note.
• Determine if taxpayer has additional information/special circumstances which would change determination and update AET/IET as needed.
• If there is no change to the determination and the taxpayer agrees to the increase, send the taxpayer an amended Form 656 or addendum to sign.
• If there is no change to the determination and the taxpayer does not agree to increase the offer, send to the IAR and issue the rejection letter.

• Follow regular processing procedures
• It will not be necessary to create an acceptance closing report on streamline offers. Document AOIC with all required information.
• Amended Forms 656 may be faxed.