This section provides a general overview and direction for the Offer in Compromise Program.

Authorities that are related to the offer program are:

The director, Collection Policy, is responsible for the all policies and procedures within the offer program.

The national program manager (OIC) is responsible for development and delivery of policies and procedures within the program.

The IRM authors are responsible for writing the policies and procedures and clearing documents through all affected offices.

Operational and program reviews are conducted on a yearly basis with the use of data and reports on the Automated Offer in Compromise (AOIC) system and Integrated Collection System (ICS). See IRM 1.4.52, Offer in Compromise Manager's Resource Guide.

National quality reviews and consistency reviews are routinely conducted.

The AOIC program is used to track offers submitted by taxpayers and record case actions and history. Ability to take action on AOIC is limited to specific offer employees. Additional permissions are also provided based on an employee’s duties and responsibilities.

ICS is used by field employees as a method for inventory control and history documentation.

Managers are required to follow program management procedures and controls addressed in IRM 1.4.52, Offer in Compromise Manager's Resource Guide.

For a list of common abbreviations, definitions and acronyms used throughout this IRM, see Exhibit 5.8.1-1, Common Abbreviations Used in IRM 5.8.1.

Additional acceptable acronyms and abbreviations are found in the ReferenceNet Acronym Database, which may be viewed at Acronym Database.

Below are recommended resources, for use when processing an offer.

Employees can find helpful information on these websites:

An offer in compromise (OIC) is an agreement between a taxpayer and the government that settles a tax liability for payment of less than the full amount owed.

Policy Statement 5-100 in IRM 1.2.1.6.17 states:

A protracted installment agreement is defined as a partial payment agreement that extends beyond the Collection Statute Expiration Date (CSED). See IRM 5.14.2.3, Collection Statute Expiration Date (CSED): Law, Policy and Procedures, for additional information.

Unless special circumstances exist, the IRS will not accept an offer if the total tax liability can be paid in full as a lump sum, by installment payments extending through the remaining statutory period for collection, or by other means of collection.

Generally, a doubt as to collectibility (DATC) offer amount must equal or exceed a taxpayer's reasonable collection potential (RCP) in order to be acceptable. However, offers may be accepted for less than the RCP amount in cases that involve special circumstances as defined in IRM 5.8.4.2, Effective Tax Administration (ETA) and Doubt as to Collectibility with Special Circumstances (DATCSC), IRM 5.8.11.3.1, Economic Hardship, and IRM 5.8.11.3.2, Public Policy or Equity Grounds.

Per IRM 5.8.7.7.2, Public Policy Rejections, an offer may be rejected based on public policy considerations if acceptance of the offer may be detrimental to the interests of fair tax administration, even though it is shown conclusively that the amount offered exceeds the reasonable collection potential and is greater than the amount that could be collected by other means.

When making phone contacts with taxpayers or representatives, SCOIC employees should follow guidelines in IRM 10.5.1.6.7, Phone, and IRM 11.3.2.3.2, Requirements for Verbal or Electronic Requests, to verify taxpayer identities and confirm representatives are authorized to discuss tax matters.

When SCOIC employees attempt to contact a taxpayer by telephone and someone other than the taxpayer answers the phone, employees should leave their names and contact numbers, but they should not identify themselves as IRS employees or state the reason for the attempted contact. Follow the guidelines in IRM 10.5.1.6.7.2, Answering Machine or Voice mail, for leaving messages involving confidential information on answering machines/voice mail when trying to contact taxpayers or their representatives.

IRC 6103(e)(8) authorizes the IRS to disclose certain information about the IRS’s efforts to collect tax to taxpayers or their authorized representatives, when the taxpayers filed a joint return and are no longer married or they are separated and no longer reside in the same household. This guidance refers to Master File Tax (MFT) 30 and MFT 35 joint liabilities and mirrored accounts with MFT 31 and MFT 65. See IRM 25.15.15, Mirror Modules for Requests for Relief from Joint and Several Liability, and IRM 5.19.1.6.7, Mirroring Accounts, for a description of account mirroring.

Information that may be disclosed verbally upon receipt of a verbal or written request from an authorized representative or spouse who has been assessed the joint tax will include:

See IRM 5.1.22.4.1.1, Prohibited IRC 6103(e)(8) Disclosures and IRM 11.3.2.4.1.1, Disclosure of Collection Activities with Respect to Joint Returns, when determining what information may be disclosed to former spouses or their authorized representatives. Some examples of disclosure situations in OIC cases are as follows.

The IRS does not have the authority to accept an offer when:

In some instances, DOJ may request the case be forwarded to them for inclusion in pending litigation. However, in DATC offers, DOJ generally requests that a field offer specialist conduct the investigation and make a recommendation to accept or reject the offer. In those cases, the OS should coordinate with Area Counsel before working the offer.

If there are any master file transaction codes on tax module(s) or other information that shows DOJ is involved in prior/pending tax assessments or prior/pending litigation, an offer may not be accepted without securing approval from Counsel. Any acceptance recommendation must advise the reviewing Counsel office of the potential for DOJ involvement and ensure Counsel concurs that the IRS has the authority to accept the offer. You may use the OIC IAT tool to identify the DOJ indicator. You may use the OIC IAT tool to assist with identifying the DOJ indicator.

Area Counsel handles Tax Court cases. The IRS has the authority to accept offers where the liability is the subject of a pending Tax Court case. See IRM 5.8.1.11.1, Unassessed Liability When No Other Tax Periods with Liabilities Exist, for information on the consideration of offers relating to unassessed liabilities. Generally, DATC cases will be under the jurisdiction of Collection, unless the case is under Appeals jurisdiction. See IRM 5.8.10, Special Case Processing, for additional information on docketed court cases.

All cases identified as docketed court cases will be immediately forwarded to a field offer (FOIC) group for investigation.

Centralized Offer in Compromise (COIC) will be responsible for determining processability on these cases.

Specialty Collection Offer in Compromise (SCOIC) is responsible for processing and investigating the following offers:

Examination is responsible for processing and investigating offers submitted based on Doubt as to Liability (excluding offers submitted to compromise a TFRP or PLET). See IRM 4.18.1.2, Exam Offer In Compromise- Understanding an Offer in Compromise (OIC).

Examination employees must also provide SCOIC with a recommendation on offers based on ETA with public policy/equity issues, when requested by SCOIC. See IRM 5.8.11, Effective Tax Administration, for public policy or equity grounds and IRM 4.18.1.2.1, Offer in Compromise - Doubt as to Liability (OIC-DATL). Also, see IRM 5.19.24, Doubt as to Liability Offers in Compromise, for more information.

Paper offers in compromise secured in Appeals offices in conjunction with related casework, such as Collection Due Process (CDP) or Equivalent Hearing (EH), will be forwarded to the COIC sites for processability determination(s), processing of the application fee(s) and required TIPRA payment(s) if paid by check, and mailing of processability letters. (Processable offer letters are provided by Appeals.).

COIC is responsible for the input of necessary transaction codes to IDRS. See IRM 5.8.4.15, Investigation of Offers under Appeals Jurisdiction, for guidelines on determining processability for Appeals CDP offers.

COIC will investigate CDP and EH offers that meet their criteria or forward the offers to FOIC for investigation.

Counsel must review offers that are recommended for acceptance when the aggregate tax liability is $50,000 or greater at the time the offer is submitted for approval (including penalty and interest). The aggregate tax liability is the total of all liabilities listed on the Form 7249 and related Form(s) 7249.

Counsel attorneys, when requested, may also provide legal opinions for matters related to investigation and processing of offers.

The Taxpayer Advocate Service (TAS) is an independent organization within the Internal Revenue Service (IRS), led by the National Taxpayer Advocate. Its job is to protect taxpayers’ rights by striving to ensure that every taxpayer is treated fairly and understands their rights under the Taxpayer Bill of Rights (TBOR).

TAS offers free help to taxpayers, including those who face financial difficulties due to an IRS problem, when they are unable to resolve tax problems on their own, or when they need assistance to address an IRS system, process, or procedure that is not functioning as it should. TAS has at least one taxpayer advocate office located in every state, the District of Columbia, and Puerto Rico.

The National Taxpayer Advocate and the Division Commissioner, SB/SE reached an agreement (effective May 30, 2011) outlining the procedures and responsibilities for processing TAS casework when either the statutory or delegated authority to complete a case transaction rests with the SB/SE. The agreement is known as a Service Level Agreement (SLA).

In preparation for a case being referred to a SB/SE function, the TAS employee is responsible for:

SB/SE must:

OIC support work that is performed by paraprofessionals (tax examiners, etc.) must be reported under ICS Code 106 — Non-Case Direct.

The TE must report any clerical or administrative duties under ICS Code 611.

Organization Function Program (OFP) time code 790–0000X covers time spent by clerical employees related to time spent in support of COIC including, but not limited to, the following:

OFP time code 700-60000 covers all actions related to the time spent by Process Examiners (PEs) on telephone contact, including requests received on Form 4442.

OFP time code 810–6603X covers all actions related to the time spent by PEs working on a newly receipted Form 656, Offer in Compromise. This includes the following below:

OFP time code 810–66025 covers all actions related to the time spent by PEs correcting input problems that show up on the IDRS transaction error listings.

OFP time code 810–6602X covers the following below:

OFP time code 810-66040 covers all actions related to the time spent by PEs processing subsequent payments.

OFP time code 810–61970 covers most actions related to the time spent by the tax examiners in the DATL COIC program.

The OFP time codes shown below are used by tax examiners in the Monitoring Offer in Compromise (MOIC) COIC program.

OFP time code 810–6601X covers all actions related to the time spent by OEs working on an assigned OIC submitted on Form 656, Offer in Compromise. This list includes, but is not limited to the following below:

An OIC is effective for the entire assessed liability of tax, penalties, and interest for all tax periods covered by the offer. All questions of tax liability for the tax periods covered by the agreement are conclusively settled. After acceptance of the offer, neither the taxpayer nor the government can reopen the case/tax liability unless there was falsification of information or documents supplied in conjunction with the offer, concealment of ability to pay and/or assets, or a mutual mistake of a material fact that would be sufficient to cause the agreement to be set aside or reformed, even if the offer is subsequently defaulted.

The liability is not compromised until all terms of the Form 656, Offer in Compromise, including any collateral agreements, are met. This includes the five-year compliance requirement. See IRM 5.8.6.2, Collateral Agreements, and IRM 5.19.7.2.2, OIC Determinations.

The IRS will systemically notify the U.S. Department of State within 30 days if the previously certified tax debt:

If the certification is found to be erroneous, the IRS will notify the State Department as soon as practical. The IRS will also notify the taxpayer once the certification is reversed.

The IRS will not reverse certification where a taxpayer requests a collection due process hearing or innocent spouse relief on a debt that is not the basis of the certification.

Taxpayers with seriously delinquent tax debt certified to the DOS will generally not be able to renew a passport or receive a new passport, and they may have their current passport revoked. Debt that is included in a pending OIC is one of the discretionary categories of debt that will be excluded from the determination of seriously delinquent tax debt, and for which a previously certified debt will be decertified (IRM 5.19.25.5, Discretionary Exclusions from Certification).

If a taxpayer with a processable offer requests assistance due to an expedited need to travel, please review IRM 5.19.25.10.1, Expedited Decertification. The DOS receives systemic notification approximately two cycles from the posting of the TC 480. The TC 480 automatically removes the passport restrictions. Form 14794, Expedited Passport Decertification, is only necessary when imminent travel is scheduled and the systemic notification timeframe is not sufficient.

If the taxpayer meets the criteria, prepare Form 14794, Expedited Passport Decertification and check the SCOIC box. You may refer to IRM 5.19.25.10.1 for more information about expedited passport decertification requests.

The IRS will generally reverse the certification of seriously delinquent tax debt and notify the U.S. Department of State within 30 days when the taxpayer meets a condition listed in IRM 5.19.25.10, Reversal of Certification. A certified taxpayer may request Expedited Decertification if they identify an imminent need for a passport. Expedited Decertification will generally shorten the 30-day processing time by 14 to 21 days.

Request expedited decertification when you verify that all three of the following conditions exist:

After you complete Form 14794, Expedited Passport Decertification, check the OIC box, and e-mail the form to your manager. The manager should sign with an electronic signature, save the document on their computer and then attach the signed document to an e-mail to *SBSE Passport Group.

The IRS will not consider an offer that is solely for a tax period or tax year that has not been assessed, unless IDRS indicates a return has been received or an assessment is pending. See paragraph (3) below.

Taxpayers may submit, and the IRS will consider, an offer to compromise taxes due on tax returns that have been filed but have not yet been assessed when unpaid liabilities already exist on IDRS. However, before the offer can be accepted, unassessed taxes should be assessed. See paragraph (3) below.

OE/OS should continue to investigate, and may accept, an offer when the taxpayer has submitted a tax return for which there may be a refund or an assessment. If the offer is accepted, document the AOIC remarks to alert MOIC of the possible assessment or refund.

If IDRS indicates that there are unfiled returns, no assessments are pending, and there are no outstanding liabilities, the offer should be returned to the taxpayer. See IRM 5.8.2.4.1, Determining Processability, for more information.

An offer will not be accepted on any tax liability that has become unenforceable due to the expiration of the statutory period for collecting the debt.

If a taxpayer makes a voluntary payment to a liability barred by statute, and no other liabilities exist, inform the taxpayer that the payment is not required. The taxpayer must be advised that the payment is purely voluntary and it can be refunded.

If the taxpayer’s intentions cannot be determined, and no other liability exists, return the payment to the taxpayer. If other tax liabilities are outstanding, advise the taxpayer that the payment will be applied to the other liabilities.

Document the case history remarks.

IRM 21.4.5.2, Erroneous Refunds Overview, defines an erroneous refund as "the receipt of any money from the IRS to which the recipient is not entitled." Erroneous refunds under Category A, B, or C are processable and may be compromised, however, Category D erroneous refunds are not processable and cannot be compromised. Definitions of the categories of an erroneous refund may be found in IRM 21.4.5.5.5, Overview of Category D Erroneous Refunds, and IRM 21.4.5.5, Erroneous Refund Categories and Procedures. These cases may be identified by the following transaction codes:

If an erroneous refund is discovered and there are less than two years remaining on the collection statute, COIC or FOIC should prepare a Form 4844 or Form 4442 to forward to A/ER (Accounting Erroneous Refund Unit) function. Refer to IRM 21.4.5.6.3, Routing Category D Erroneous Refund Packages.

If an offer is submitted and an erroneous refund is discovered, the offer will be returned to the taxpayer and closed as a processable return. See IRM 5.8.7, Return, Terminate, Withdraw, and Reject Processing, for additional information on closing a case as a processable return.

Category D refunds included as erroneous refunds that do not fall under any other category where the Assessment Statute Expiration Date (ASED) has expired but the Erroneous Refund Statute Expiration Date (ERSED) remains open. See IRM 21.4.5.15.1.1, Statutes of Limitations Category D Erroneous Refunds IRC 6532(b) ERSED, for more information.

The following are examples and causes of Category D erroneous refunds. This list is not all-inclusive:

These refunds can only be recovered by an erroneous refund lawsuit, refund offset or voluntary repayment. Administrative collection actions such as the issuance of a Notice of Federal Tax Lien or a levy cannot be taken to recover Category D erroneous refunds.

All fees and payments received should be applied to the liability(s) in accordance to current TIPRA procedures. See IRM 5.8.2.8.1, Processable Offers - Payment Processing, for additional information.

If the erroneous refund was due to identity theft or practitioner fraud or misconduct, refer to IRM 5.8.4.22.5, Identity Theft, and IRM 5.8.4.22.6, Return Preparer Fraud or Misconduct, for additional information.

While the IRS is charged with collecting certain child support obligations, we do not have the authority to compromise non-tax liabilities. Child support obligation accounts are identified on the Non-Master-File with a Master File Tax (MFT) code 59.

IRC 6305 requires the Secretary of the Treasury to assess and collect certain child support obligations certified by the Secretary of Health and Human Services. The Secretary of the Treasury is not authorized to compromise these liabilities. The individual may seek to pursue any available equitable, or administrative action in a state court or before a state agency to determine the correct liability or to recover an amount collected under this section.

If a taxpayer proposes a compromise that includes a child support liability, the IRS employee should request that the offer be amended to remove the child support obligation.

If the offer is to be accepted, the liabilities may be compromised without including the child support debt. If the taxpayer refuses to remove the child support liability, the offer should be returned using the open paragraph stating, "We do not have authority to compromise child support obligations" , and close the case as a processable return following procedures defined in IRM 5.8.7, Return, Terminate, Withdraw, and Reject Processing.

IRC 7122 and the regulations govern the formation and legal effect of offers. The courts also apply general principles of contract law. Under these principles, a minor child has the power to repudiate or disaffirm most contractual obligations. A minor child would also have the ability to repudiate or disaffirm a compromise signed on behalf of the minor child by a parent or power of attorney.

If designated, a parent or guardian can receive information about the child's return but can’t legally bind the child to a tax liability unless authorized to do so by the law of the state in which the child lives. See Pub 929.

Because a compromise under IRC 7122 may not legally bind a minor, it is recommended that the IRS not enter into compromises with minors or with a parent on behalf of a minor. In these cases, the offer will be returned as a processable return as defined in IRM 5.8.7, Return, Terminate, Withdraw, and Reject Processing.

A taxpayer with diminished mental capacity may submit an offer and the IRS may accept it based on current statutes, policy, and procedures. In this situation, the offer is a voidable contract that may be voided at the election of the taxpayer with diminished capacity when:

As of April 8, 2003, the IRS has the authority to assess and collect Report of Foreign Bank and Financial Accounts (FBAR) civil penalties under Title 31 CFR 103.56(g). The delegation includes the authority to investigate possible FBAR civil violations, provided in Treasury Directive No. 15-41 (Dec. 1, 1992), and the authority to assess and collect the penalties for violations of the reporting and record keeping requirements. See IRM 4.26.16.5.1, FBAR Penalty Authority, for more information.

FBAR assessments cannot be compromised under IRC 7122.

Title 31 penalties do not post to IDRS. If the taxpayer lists any non-IDRS FBAR penalties on Form 656 and refuses to remove them, the offer must be returned without further consideration. See IRM 5.8.10.15, Offers Submitted on Offshore Voluntary Disclosure Program, for additional information.

FBAR penalties are separate from penalties applicable to Form 8938, Statement of Specified Foreign Financial Assets. See IRM 5.21.6.9, Foreign Account Tax Compliance Act (FATCA), for information on the differences between FBAR and Form 8938. See IRM 20.1.9.22, IRC 6038D – Information with Respect to Specified Foreign Financial Assets, for the obligations to file Form 8938 applicable to individual taxpayers and certain entities and the penalties for non-compliance.

There are unique issues involving IRC 965 liabilities, including the ability of the taxpayer to pay in installments or defer the assessment under certain circumstances, which may affect the processing and investigation of offers. Additionally, consideration of a taxpayer’s ability to repatriate the foreign earnings that are the basis for the IRC 965 liabilities may require the assistance of an Abusive Tax Avoidance Transaction (ATAT) revenue officer (RO) to evaluate financial information and assist in conducting research relative to income and assets.

In general, beginning with the tax year ended 12/31/2017 or 12/31/2018, taxpayers may be liable for taxes under IRC 965. This IRC section provides that certain taxpayers must pay a transition tax on the untaxed foreign earnings of certain specified foreign corporations as if those earnings were repatriated to the United States.

Provisions of IRC 965 allow a taxpayer to elect to pay the net tax liability in installments over eight years (IRC 965(h)) or, if the taxpayer is a shareholder in an S corporation, to elect to defer the assessment until a triggering event occurs under (IRC 965(i)), at which point the taxpayer can elect to pay the net tax liability in installments over eight years.

If Form 656 includes any modules in the liability section that involve IRC 965, follow guidance regarding the processability of the offer and the impact IRC 965 may have on the resolution of the offer investigation. See IRM 5.8.4.22.7, IRC 965 (Transition Tax) Liabilities.

A paper Form 656 that is received elsewhere by an IRS employee (including a field revenue officer) must be forwarded to the appropriate COIC site for processing within 24 hours of receipt. You may date stamp the form, but do not date stamp in the IRS Received Date section titled COIC Use Only. The Form 656, Offer in Compromise, the application fee and any applicable TIPRA payments (20% of offer amount for lump sum offers or first proposed payment for periodic payment offers), as well as any documents submitted with the offer, must be included, unless an individual taxpayer qualifies for the low-income waiver or the OIC is submitted on Form 656-L, Offer in Compromise (Doubt as to Liability). The information should be sent to the appropriate COIC site using Form 3210, Document Transmittal, and must be sent by traceable methods if an application fee and/or payment is attached.

Taxpayers may not send unsolicited offers to the IRS by fax or other electronic methods, unless they submit the original offers through IOLA. Offers may be accepted by fax or by other electronic methods only when solicited by SCOIC personnel, usually in conjunction with a related assigned offer. Occasionally, a Form 656 may not contain an original signature because the contract was faxed to a taxpayer’s representative before the Form 656 was printed and mailed to COIC; however, these are clearly original offers being submitted by the taxpayer for processing, with receipt dates that can be verified by the postmarks. In contrast, offers without original signatures submitted to other IRS personnel may be construed as copies of offers already in process. For this reason, offers submitted from internal sources (such as Appeals or Field Collection) must contain original signatures. A Form 656 secured elsewhere in the IRS without an original signature will not be considered a valid contract.

The Form 657, Offer in Compromise Revenue Officer Report, must be completed and attached to the offer package for offers from taxpayers whose collection cases are assigned to revenue officers (ROs). This form is to be signed by the RO. Managerial approval and signature is only required if the RO is recommending the offer be returned as solely to delay collection. The RO should retain all information related to the collection case. All additional information related to the OIC should be sent to the appropriate COIC site using Form 3210, Document Transmittal, or sent to COIC via encrypted email with a read receipt, within four days of receipt of the offer.

Types of additional information may include, any information gathered during the field investigation that verifies or refutes amounts claimed on the CIS submitted with the offer.

The Centralized DATL processing unit located at the Brookhaven campus receives all Form 656-L submitted on the basis of DATL. COIC will receive Trust Fund Recovery Penalty (TFRP) and Personal Liability for Excise Tax (PLET) offers and forward them to field OIC offices for investigation. DATL exam offers should be immediately forwarded using Form 3210, Document Transmittal, to: Internal Revenue Service - DATL Unit, 1040 Waverly Avenue Stop 681-D, Holtsville, NY 11742.

Offers based on DATL for TFRP or PLET should be sent to: Internal Revenue Service - COIC Unit, 1040 Waverly Avenue Stop 680, Holtsville, NY 11742. See IRM 5.8.2.3(8) for more information.

Follow procedures in IRM 10.5.1.6.9.3, Shipping, when shipping through a private delivery carrier such as UPS or FedEx.

The full name, address, social security number (SSN), employer identification number (EIN), and/or individual taxpayer identification number (ITIN) of the taxpayer must be entered on Form 656. If the taxpayer(s) uses a mailing address that is different from the street address, the physical home address must be included as well.

A taxpayer not eligible for an SSN must use an ITIN when filing their return. ITIN is governed by rules described in IRC 6109, Identifying Numbers, and the corresponding regulations provide the rules that govern ITINs. ITIN applicants are generally resident aliens (green card or substantial presence test met) or nonresident aliens (not U.S. citizens and green card or substantial presence test not met). While an ITIN does not give the individual the right to work, many employers hire and pay the taxpayer using the ITIN for reporting purposes.

The OE or OS should not question the appropriate use of an ITIN by the employer. Once ITIN information is verified, normal offer procedures should be followed if the information does not rise to the level of fraud and/or identity theft. If fraud and/or identity theft is present and documented, the offer should be closed as a public policy rejection.

When submitting offers in compromise, taxpayers must indicate the basis upon which they propose to compromise: Doubt as to Collectibility (DATC), Doubt as to Liability (DATL) and/or to promote Effective Tax Administration (ETA). See IRM 5.8.8.2.2, Form 14640, Addendum to Form 656. Employees must secure an amended Form 656 when changing the basis of the offer.

If the taxpayer submits a Form 656-L, the basis for compromise will be DATL only.

If the taxpayer submits a DATL and a DATC offer at the same time, refer to IRM 5.8.10.14, Taxpayer Files both Doubt as to Liability and Doubt as to Collectibility Offers, for further information.

The total amount of money offered must be indicated and must be more than zero. The amount offered may not include money already paid, expected future refunds, funds attached by levy, or anticipated benefits from capital/net operating losses.

Taxpayers are expected to pay the entire amount offered as soon as reasonably possible. Acceptable offer payment terms should be determined by the OE or OS and should not be limited to the proposal of the taxpayer. The required TIPRA payments may be waived if the taxpayer meets low-income certification guidelines.

The amounts and due dates of payments must be specified.

There are two types of payment terms offered on the Form 656 that the IRS and the taxpayer may agree to:

A taxpayer may designate TIPRA payments (pre-acceptance) to a specific liability including trust fund. The taxpayer must designate each offer payment at the time of the payment submission. Once the offer has been accepted, the funds are applied in the government’s best interest and the taxpayer no longer has the right to designate payments.

"Accord and satisfaction" does not apply to the IRS, even when written on a TIPRA check. A taxpayer cannot circumvent the IRC 7122 procedures for compromising a tax liability. The only way to compromise the tax liability is under IRC 7122, which does not recognize accord and satisfaction.

The application fee may not be designated.

Taxpayers must agree to all the standard conditions of the agreement as they are printed on the Form 656.

If the taxpayer submitted the Form 656 altering any of the provisions of Form 656, Section 7, the offer should be immediately deemed not processable based on an altered Form 656.

Each separate tax period and type of tax must be indicated on the Form 656. TFRP assessments will include an assessment for each quarter. Verification on IDRS will be required to determine that the assessment has been made.

The taxpayer may submit an offer that does not include all outstanding liabilities. Prior to accepting the offer, the OE/OS must include all outstanding liabilities on the Form 656 and make sure they are included on AOIC. No amended Form 656 is required. The exception to this would be if the taxpayer owes any liabilities that may not be compromised. Liabilities that may not be legally compromised will not be included as part of the offer.

An offer submitted on Form 656-L, under DATL criteria, will be accepted for only the tax periods that are in question.

Taxpayers must attach a separate statement to Form 656 to explain why they are submitting the offer.

If a special circumstance exists, the taxpayer should explain the situation and include all supporting documents to assist in verification of the special circumstance that is being claimed.

Each taxpayer that is party to an offer should personally sign the Form 656. When unusual circumstances prevent this (e.g., the taxpayer is incapacitated), an authorized representative or court appointed representative may sign for the taxpayer.

In the case of joint offers, all parties, or their designated representative as explained above, must sign the Form 656 to ensure the provisions of the agreement bind all parties.

If the taxpayer or POA has not dated the Form 656, use the Form 433-A (OIC) signature date or IRS received date, whichever is earliest. The date of the offer is needed when sending out letters.

The case file should include a copy of the properly executed Form 2848, Power of Attorney and Declaration of Representative, or verified CFINK print as verification of the representative's authority.

The IRS requires an ink/original signature on the Form 656 if the paper form is mailed to the IRS. The only exception is if the Form 656 was faxed or electronically transmitted before it was sent to COIC or if the taxpayer submitted the Form 656 to the IRS electronically via IOLA. For Forms 656 faxed before they were mailed to the IRS, the SCOIC employee will confirm the fax sender’s identity after receipt of the offer.

A Form 656 signed with an "X" must also include signature of a witness.

Since the CIS requires certification under penalty of perjury, the taxpayer(s) must personally sign the 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. The only exception is if the Form 433-A(OIC) or Form 433-B(OIC) was faxed or electronically transmitted before it was sent to COIC, or if the taxpayer submitted the Form 433-A(OIC) to the IRS electronically via IOLA. If the Form 433-A(OIC) or Form 433-B(OIC) was faxed before it was mailed to the IRS, the SCOIC employee will confirm the fax sender’s identity after receipt of the forms.

Offers submitted for corporations should reflect the corporate name on the first signature line of the Form 656. The signature name and title of the authorized officer should be reflected on the second signature line of the Form 656.

An offer submitted by the fiduciary of an estate of a deceased taxpayer will be binding on the taxpayer's estate to the extent that it would be binding on a taxpayer who submits an offer on their own behalf. Include a copy of the fiduciary's appointment document in the case file.

If an offer is submitted on behalf of a deceased taxpayer, the individual who signs the offer must have the authority to do so. This authority can be designated by a will appointing that individual as the executor or by written authorization from the probate court. Refer to IRM 5.8.10.4.1, Death of Taxpayer, for further information.

The Disaster Assistance program uses IDRS to ensure that systemic relief is provided to affected taxpayers within identified zip codes in a covered disaster area.

Indicators are posted on IDRS, via IT systemic programming, through the use of computer transaction code (TC) 971. TC 971 AC 087 will post a corresponding -O freeze on the tax account of an affected taxpayer. TC 971 AC 688, will post a corresponding -S freeze on the tax account of an affected taxpayer.

Generally, the -O freeze will be applied only in the most catastrophic disasters and, only to the areas that suffered the most damage within the area designated by FEMA for Individual Assistance programs. When warranted, DPO analysts may limit the application of the -O freeze to selected zip codes in a county when other areas receive a -S freeze. Factors to be considered include:

The disaster victim code will post on the entity portion of IDRS. It is a value indicator that is defined as follows: