This section provides procedures for considering combination OIC requests.

It is possible that a taxpayer may submit an offer in compromise based on both doubt as to liability and collectibility, and/or effective tax administration. Combination offers are generally worked in Collection first, and are added to the Automated Offer in Compromise (AOIC) program in Collection.

If Collection accepts the offer based on doubt as to collectibility, no action will be required of Examination. Collection will take the necessary steps to close the offer.

If Collection rejects the offer, the file will manually be transmitted to Examination for consideration based on doubt as to liability. Examination action/offer consideration should be initiated within 30 days and monthly contact should be maintained with Collection to inform them of the status and projected closure date.

If the taxpayer also requested consideration on the bases of effective tax administration, Examination will determine the doubt as to liability issues and provide a recommendation to Collection regarding any DVC issues related to application of the tax law. In no circumstance should Collection accept an offer on the basis of effective tax administration until doubt as to liability and doubt as to collectibility has been considered and determined not to be applicable.

If Examination accepts the offer based on doubt as to liability, they will notify Collection so the controls can be closed.

If Examination rejects the offer based on doubt as to liability and finds no detriment to voluntary compliance issues, Examination will prepare the rejection letter addressing both the Examination and Collection issues. (Collection should indicate the reason for their rejection and the appropriate verbiage/reason paragraph in the file).

If Examination rejects the offer based on doubt as to liability but identifies a detriment to voluntary compliance (DVC) issue, the file should be forwarded (or returned) to Collection for consideration of the collectibility and effective tax administration issues, and with the recommendation from Examination on the DVC issue.

Independent Administrative Review is completed in Examination on the applicable examination provisions/issues and IAR should have already been completed in Collection before the file was received in Examination.

After appropriate approval/signature is obtained on the rejection memorandum and letter, the rejection letter will be date stamped and sent to the taxpayer by Examination. A copy of the date stamped letter is sent to Collection to update their AOIC controls. If the taxpayer does file a timely appeal request, the offer package will be forwarded to Appeals. If the taxpayer does not appeal, Examination will close the offer case and appropriately notify Collection to likewise close their controls.

The OIC coordinator should periodically meet with Collection OIC personnel (and/or inspect Collection closed Forms 1271 and 7249) to ensure examination issues were appropriately considered and/or coordinated.