- 5.8.10.1 Overview
- 5.8.10.2 Bankruptcy
- 5.8.10.3 Other Insolvency Cases
- 5.8.10.4 Death of Taxpayer
- 5.8.10.5 Transferee
- 5.8.10.6 Discharge and Subordination Requests
- 5.8.10.7 Effect of Previous Offers on Collection Statute
- 5.8.10.8 Indicators of Practitioner Fraud
- 5.8.10.9 Indicators of Taxpayer Fraud
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During the investigation of an offer, certain situations may be encountered that require consideration before a final determination can be made. This section discusses how to treat these situations when evaluating an offer.
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Bankruptcy can have a specific impact on the Service's consideration of an offer. The taxpayer may file bankruptcy and an offer simultaneously, or file an offer in an attempt to avoid bankruptcy, or a file an offer after a bankruptcy has been concluded. The following discusses these situations.
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The Service will not consider an OIC under its administrative OIC procedures while a taxpayer is in bankruptcy. When a taxpayer files bankruptcy, the Bankruptcy Code provides procedures to resolve the Service's claim.
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An OIC will not be considered under administrative OIC procedures until the bankruptcy is concluded. In Chapter 7 cases, an administrative compromise with the taxpayer can be considered after the taxpayer has received a discharge. See IRM 5.8.10.2.3 below. In Chapter 11, 12, and 13 cases, an administrative compromise will not be considered until the taxpayer completes payments under the plan or the bankruptcy is dismissed by the court.
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If a taxpayer is in bankruptcy when an administrative OIC is submitted or during a pending offer investigation, the offer is returned.
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When a taxpayer threatens bankruptcy, the impact of bankruptcy on the Service's ability to collect must be considered. If the OI believes, based upon factual information, that the taxpayer is seriously considering filing bankruptcy, the employee should discuss the benefits of filing an administrative offer instead.
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Benefits to the Service:
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The Service can negotiate for amounts collectible from future income and from assets beyond the reach of the government, that may not be collectible if the taxpayer files bankruptcy.
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Negotiations may result in an offer amount that exceeds the amount recoverable in an insolvency proceeding.
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Terms for payment of an offer may result in funds being collected in a shorter time than through bankruptcy.
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Benefits to the Taxpayer:
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Bankruptcy carries certain negative repercussions that an OIC will not cause, such as the effect on credit ratings.
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Bankruptcy does not discharge all tax liabilities.
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If a NFTL has been filed, the federal tax lien may survive bankruptcy against certain assets.
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While evaluating the acceptability of an OIC when the threat of bankruptcy is a consideration, determine the RCP as defined in IRM 5.8.5. To determine the amount that would be collected through bankruptcy and what liabilities would be discharged, contact an advisor in the Insolvency Section and discuss the facts of the case.
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Analysis of the collectibility, if bankruptcy were filed, along with the financial analysis and a determination of liabilities that would be fully discharged, should result in the ability to make an informed decision regarding the OIC. It should also open negotiation with the taxpayer.
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When doing the analysis consider the following questions:
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Is the Service the sole or major creditor?
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Would taxes be dischargeable in bankruptcy?
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Does the offer amount equal or exceed what the Service can reasonably expect to recover from bankruptcy?
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Are there other considerations, such as what could be collected on liabilities that would not be discharged, or what could be collected from property outside of the bankruptcy, including third parties?
Note:
Under no circumstances will the Service accept less than would be recoverable from a Chapter 7 bankruptcy, unless special circumstances exist.
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If it is determined that processing an offer under the Service's administrative procedures is the better alternative, then proceed with the offer process.
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In most Chapter 7 bankruptcies, the discharge is issued and the stay lifted in approximately 5 months. An OIC will not normally be considered under the Service's administrative procedures until the discharge is granted.
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For debtors discharged in Chapter 7, where the bankruptcy case is still pending, it is uncertain whether the Service would still have a valid claim in bankruptcy if an OIC is accepted. Therefore, the amount acceptable should include the amount that the Service can reasonably expect to recover from the bankruptcy in addition to what can be collected from the taxpayer on non-discharged liabilities or from property outside the bankruptcy.
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When a taxpayer files bankruptcy after an OIC is accepted, the Service may need to take specific actions to secure unpaid offer funds or to secure payment of tax through the bankruptcy proceeding. (See IRM 25.17, Bankruptcy, for additional information.)
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In accordance with the Bankruptcy Code, the offer should not be defaulted or payments solicited while the taxpayer is in bankruptcy.
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When the Service becomes aware that a bankruptcy has been filed after the acceptance of an OIC:
If… Then… The offer funds have been paid in full The bankruptcy filing has no effect on the accepted offer. The offer funds have not been paid in full Contact the Insolvency Unit to determine necessary action to secure the Service's interest in the bankruptcy proceeding.
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A copy of the court order or other evidence should accompany Form 656.
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The following should be secured in "Receiverships" and other non-bankruptcy insolvencies:
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A general statement of the circumstances which resulted in the receivership and the purpose of the receivership; that is, whether the objective is liquidation of assets, conservation of assets, foreclosure of a mortgage or reorganization.
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A copy of the petition for the appointment of a receiver and a copy of the court order appointing the receiver or trustee can be used in lieu of a general statement, if the petition provides the information above.
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Copies of all pertinent schedules filed with the court.
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Consideration of an OIC frequently presents questions concerning the rights of the government to priority in the collection of the tax claims over the claims of other creditors of the taxpayer.
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The rights of other creditors are based on liens which may be recognized by state law, but because of the taxpayer's assignment of assets for the benefit of other creditors, the provisions of 31 U.S.C. § 3713 apply.
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When considering the offer:
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Evaluate the rights of all creditors,
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Evaluate all facts and circumstances relating to the various claims,
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Verify all pertinent dates, such as the origin and filing of all claims and liens, and
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Verify the steps which have been taken towards the enforcement of the claimant's alleged rights.
If… Then… The priority rights of the United States are disregarded when the funds of the estate are disbursed An assignee for the benefit of creditors, as well as an executor or administrator of a decedent's estate, may become personally liable. A corporation is the assignor and the tax liability sought to be compromised consists of withholding of Federal Insurance Contribution Act (FICA) taxes, or taxes which the assignor might be required to withhold or collect from others and pay over to the government Consider the possibility of enforcing the TFRP provisions of the code. -
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When questions arise regarding the priority rights of the United States contact Area Counsel.
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When the Service is notified of the death of the taxpayer who submitted an OIC that is currently under consideration, the Service can no longer consider the OIC. A termination letter will be generated from AOIC and the offer should be closed with the termination closure option.
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Many times the OIC under consideration was submitted jointly by a husband and wife. In that situation, contact with the surviving spouse should be made to determine whether there is a probate proceeding pending. See IRM 5.5, Insolvencies, Descendents' Estates and Estate Taxes, and IRM 5.17.13.10, Descendents Estates, for more information about decedent taxpayers and probate proceedings.
If… Then… There is a probate Explain that consideration of the offer will be terminated and that another offer can be submitted once the probate has been concluded. Contact Technical Support and advise of the probate proceeding and the tax liability due. Terminate consideration of the offer. There will be no probate proceeding and the surviving spouse does not want us to continue considering the OIC Terminate consideration of the joint offer due to the death of the spouse. There will be no probate proceeding, the surviving spouse does want us to continue considering the OIC, and the surviving spouse is named as executor by a will, or if there is no will, the spouse is named as the personal representative by the probate court Even if the surviving spouse is named as the executor in a will, the spouse may need approval from the probate court, which determines the validity of wills, prior to acting on behalf of the decedent spouse. Consult Area Counsel.
Once the surviving spouse is authorized to act on behalf of the decedent by the probate court, obtain a copy of the will and/or court order, and an amended OIC reflecting the spouse as deceased and continue consideration of the joint offer.There is no probate proceeding and the surviving spouse wants the Service to continue consideration of the OIC; however, the spouse was not appointed executor by a will (with approval by the probate court), or if there is no will, the surviving spouse is not named as the personal representative by the probate court Since the surviving spouse does not have the authority to compromise the liability of the deceased taxpayer, secure an amended offer removing the deceased spouse's name and continue consideration of an offer for the surviving spouse's obligation only.
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When an OIC investigation reveals the potential for a transferee situation, the burden of proof of transferee liability rests with the government.
Note:
If it is determined that a transferee investigation should be initiated, it will not be conducted by the Offer Investigator. Instead, it will be conducted by a field RO by generating an Other Investigation. Other Investigations referred per these instructions should be considered high risk cases, code 100, and processed accordingly.
If… Then… A potential transferee is discovered during an OIC investigation Conduct an investigation to determine if a transferee exists. A transferee liability exits -
Determine the amount the Service may reasonably expect to collect from the transferee.
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Attempt to negotiate an acceptable OIC amount with the transferee value included in the RCP calculation.
There is a question whether a transferee liability may be established and sustained -
Determine the value of the transferee based on the degree of doubt regarding the transferee being sustained.
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Attempt to negotiate an acceptable offer amount including this value in the RCP.
Note:
Flexibility should be exercised during negotiations if the transferee assessment will not be pursued.
While investigating an OIC and the OI determines that a transferee assessment should be pursued and negotiations have not resulted in an acceptable offer amount -
Attempt to secure a withdrawal letter from the taxpayer.
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If the taxpayer does not withdraw the OIC, prepare the rejection closing documents and follow procedures for recommending rejection with appeal rights. Include the value of the transferee in the RCP.
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Prepare an Other Investigation to be issue to a field RO to investigate the transferee issue.
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The government is bound by the payment terms of an accepted OIC. The Service cannot require payment of the offer amount in different terms, other than agreed to in the OIC agreement.
Note:
In these cases, the discharge or subordination investigation will not be conducted by the OI. Instead, it must be conducted by the appropriate Technical Support by generating an Other Investigation.Other Investigations referred per these instructions should be considered high risk cases, code 100, and processed accordingly.
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Requests for discharge or subordination received while an OIC is pending are to be handled as follows:
If… Then… The discharge or subordination request is approved. Advise the taxpayer that proceeds from the discharge or subordination will be applied to the OIC, if accepted. If the OIC is not accepted, the proceeds will be applied to the tax liability. Before delivering the certificate of discharge or subordination, require the taxpayer to execute a Form 3040. In the signature block, have them write the word "irrevocable" . Retain the signed Form 3040 in the case file for use in the event the OIC is returned, withdrawn, or rejected. Note:
For those taxpayers who have submitted a discharge or subordination while the OIC is pending, the taxpayer should check the box and place their initials next to that box. This will serve the same purpose as having the taxpayer write "irrevocable" on the Form 3040.
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Requests for discharge or subordination received after an OIC has been accepted, but before all the payment terms have been met, should be handled as follows:
If… Then… The taxpayer does not intend to apply the proceeds received from the discharge or subordination to the OIC amount Deny the discharge or subordination request. The taxpayer does intend to apply the proceeds toward the OIC amount Request an investigation of the discharge or subordination from Technical Support and then coordinate with Technical Support to apply the proceeds to the OIC amount.
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Over the years there have been numerous changes in the law and IRS procedures relating to the extension of the statutory period for collection while OIC's are being considered. The information provided in this section will assist in determining the correct CSED, which can impact the number of required payments.
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For OIC's pending prior to 1/1/2000, the taxpayer executed a waiver of the statutory period for collection, extending the collection statute for the period the OIC was under consideration and for an additional one year. For OIC's accepted prior to 1/1/2000 this waiver of the statutory period for collection also included the period of time the terms of an accepted OIC were still in effect.
Note:
RRA 98 imposed a limitation for OIC's subject to a waiver of collection statute. The waiver cannot extend the CSED beyond either 12/31/2002, or the original CSED, whichever is later.
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For OIC's submitted or pending after 12/31/1999, the statutory period for collection was suspended, by operation of law, while the OIC was pending, for 30 calendar days following rejection of an OIC, and for the period the rejection was being considered in Appeals. This suspension of the collection statute is effective through 12/20/2000.
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For OIC's that were pending prior to 1/1/2000 and were still pending on or after 1/1/2000, the collection statute is extended by both waiver periods and by the suspension period (See paragraphs 2 and 3 above).
Note:
The limitation on the waiver of collection statute applies to these OIC periods.
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The Community Renewal Tax Relief Act of 2000 was signed into law on 12/21/2000. This act eliminated the suspension of the statutory period for collection, effective on the day of enactment (12/21/2000).
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The Job Creation and Workers Assistance Act was signed into law March 9, 2002. This law reinstated the suspension of the statutory period for collection, by operation of law, while the OIC is pending, for 30 calendar days following rejection of an OIC, and for the period the rejection is being considered in Appeals.
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Cases may be encountered where prior rules were in effect. The following chart shows the changes that have occurred in this area.
If the offer has a… and was… then… Pending date of 1/1/2000 or later Accepted prior to 12/21/2000 The CSED is extended from the pending date (TC 480) until the acceptance date (TC 781/788). Pending date of 1/1/2000 or later Accepted between 12/21/2000 and 3/8/2002 The CSED is only extended from the pending date (TC 480) through 12/20/2000. Pending date of 1/1/2000 or later Accepted after 3/8/2002 The CSED is extended from the pending date (TC 480) through 12/20/2000 and if the offer was still pending, it was also extended from 3/9/02 until the date of acceptance (TC 780). Pending date of 1/1/2000 or later Rejected and taxpayer does not appeal The CSED is extended from the pending date (TC 480) until 30 calendar days after the rejection letter is issued (TC 481), excluding any portion of that period which falls between 12/21/2000 and 3/8/2002. Note:
As of 2/2/2004, the AOIC system automatically 30 days to the date of the TC 481 on rejected not Appealed offer closures prior to transmission to master file. Appealed rejections carry the Appeals rejection date.
Pending date of 1/1/2000 or later Rejected and sustained in Appeals The CSED is extended from the pending date (TC 480) until the date that Appeals issues a decision letter (TC 481), excluding any portion of that period which falls between 12/21/2000 and 3/8/2002. Pending date prior to 1/1/2000 Accepted prior to 1/1/2000 The CSED is extended from the pending date (TC 480) until all payment installments are made (TC 780) plus 1 year. The CSED cannot be extended beyond 12/31/2002 or the original CSED date, whichever is later. Pending date prior to 1/1/2000 Accepted after 12/31/1999 but prior to 12/21/2000 The CSED is extended from the pending date (TC 480) through 12/31/99 plus 1 year. The CSED cannot be extended beyond 12/31/2002 or the original CSED date, whichever is later. If the offer was still pending on 1/1/2000, the CSED would also be extended from that date until the date of acceptance (TC 780). Pending date prior to 1/1/2000 Accepted after 12/20/2000 The CSED is extended from the pending date (TC 480) through 12/31/99 plus 1 year. The CSED cannot be extended beyond 12/31/2002 or the original CSED date, whichever is later. In addition, the CSED is extended from 1/1/2000 through 12/20/2000. However, the CSED would not be extended from 12/21/2000 until 3/8/2002. If the offer was still pending on 3/9/2002 the CSED would also be extended from that date until it was accepted (TC 780). Pending date prior to 1/1/2000 Rejected prior to 1/1/2000 The CSED is extended from the pending date (TC 480) until the rejection date (TC 481) plus 1 year. The CSED cannot be extended beyond 12/31/2002 or the original CSED date, whichever is later. Pending date prior to 1/1/2000 Rejected 1/1/2000 or later The CSED is extended from the pending date (TC 480) until 12/31/1999 plus 1 year. The CSED cannot be extended beyond 12/31/2002. In addition, the CSED is extended from 1/1/2000 until 12/20/2000 or the rejection date (TC 481) plus 30 calendar days, whichever is earlier, and from 3/9/2002 until the rejection date (TC 481) plus 30 calendar days. -
If only one party to a joint assessment files an OIC, then the statute is suspended just for that person. The appropriate CSED suspension code must be input on IDRS to identify the specific taxpayer for which the offer applies. They are described below.
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P = Primary
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S = Secondary
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B = Both
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During the verification of financial statements, employees should always be aware of any indications that a practitioner violated the duties relating to practice before the IRS (Circular No. 230 Sections 10.20 to 10.23) or engaged in incompetent or disreputable conduct (Circular No. 230 Section 10.51) relating to OIC. Also, be aware of indicators of fraud. A referral to the Office of Professional Responsibility (OPR) may be appropriate. Some examples of those indicators are:
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Failure to exercise due diligence. This is conduct that shows that the practitioner did not act consistently with the affirmative duties requiring a thorough effort on the taxpayer's behalf.
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Deceptive advertising with respect to offers (such as unqualified promises of settlement, or "pennies on the dollar" ).
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Section 822 of the American Jobs Creation Act of 2004, PL. 108-357, 118 Stat. 1418, expands the sanctions that the Secretary may impose on representatives to include both censure and monetary penalties. If the employee is acting on behalf of an employer or other entity, the Secretary may impose a monetary penalty on the employer or other entity if it knew, or reasonably should have known, of the conduct.
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A referral should also be made if the employee becomes aware that a suspended or disbarred practitioner is practicing or attempting to practice before the IRS, or when it is noted that an unenrolled return preparer has been added to an otherwise valid Form 2848, Power of Attorney and Declaration of Representative , to attempt to have this person represent the taxpayer before the IRS during the course of the offer investigation.
Note:
The referral process is required by Section § 10.53(a) and 10.53(b) of Circular No. 230.
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Employees should also report suspected violations of 18, U.S.C. § 207, Post Employment Conflicts of Interest (Circular No. 230, Section 10.25), to TIGTA or the Associate chief counsel (General Legal Services).
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Under the authority provided by 31 U.S.C. § 330 and 31 CFR § 10, which is published asTreasury Department Circular No. 230 "Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, and Appraisers before the Internal Revenue Service" (Revised 6/20/2005), OPR renders decisions on applications for enrollment to practice, makes inquiries into matters under its jurisdiction, and institutes disciplinary proceedings against tax practitioners who are found to have violated any part of Circular No. 230.
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A pattern of inappropriate conduct is a factor that the OPR will consider in determining whether to bring disciplinary action against a practitioner under Circular No. 230.
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Below are some indicators of abuse by practitioners.
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Badge of Abuse #1 — Establishing a pattern on several Offer in Compromise investigations to influence the case disposition or Service employee to obtain the desired results by:
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Using abusive language
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Threatening claims of misconduct (e.g., Section 1203 of the RRA)
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Making false claims of misconduct
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Making false accusations
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Verbal/Physical threats or assaults
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Offering a bribe (e.g., offering gifts or other things of value)
Note:
Verbal and/or physical threats/assaults should be referred directly to the local TIGTA office or by calling the TIGTA National Hotline at 1–800–366–4484 or 1–800–589–3718 after hours.
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Badge of Abuse #2 — Establishing a pattern on several OIC cases in which investigations are delayed by the practitioner performing one or several of the following actions:
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Missing appointments
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Canceling appointments at the last moment with no good cause provided
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Agreeing to provide requested documentation and/or information and then refusing to follow through, hindering the ability of the employee to complete the investigation of the offer
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Providing partial information requiring repeated call backs/correspondence and delays.
Note:
IRM 1.25.1.3 provides that a referral must clearly document all case actions leading to the request for information/documents/substantiation, and the practitioner's failure to comply. This set of facts may also support a referral under Section 10.22 (Diligence as to accuracy) and Section 10.23 (Prompt disposition of pending matters) of Circular 230. In the event that a practitioner refused to provide documentation on grounds of privilege, the Office of Chief Counsel should be consulted.
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Badge of Abuse #3 — Establishing a pattern on several offer submissions, which would include significant omissions, or significant and unreasonable discounts on a number of assets. The information provided must be shown to be materially misrepresented, not merely a simple error. The omissions or material misrepresentations could include, but are not limited to, the following:
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Assets are omitted
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Listed assets are undervalued
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Understating the taxpayer's income
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Over stating the taxpayer's expenses
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CIS reflects a large number of claimed dependents
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CIS reflects similar dollar amounts in both checking and savings accounts
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CIS reflects no available credit, including credit cards
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CIS reflects omissions of assets
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CIS shows similar listings for monthly income and expenses (e.g. same low wages, same child care expenses)
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The badges of practitioner abuse may also be indicators of potential fraud. The inappropriate misconduct should be discussed with your Fraud Technical Advisor (FTA) if appropriate. If a decision is made to refer the practitioner to TIGTA and/or the Fraud program for potential criminal sanctions, these actions must be clearly documented in the OPR referral.
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Employees should be alert to the patterns and/or trends of inappropriate conduct as discussed in IRM 5.8.10.8.2 above. When patterns and/or trends are identified through OIC's submitted by a tax practitioner, or when reported to an employee by any other person other than an officer or employee of the Service, the employee should complete and submit Form 8484, Report of Suspected Practitioner Misconduct and Report of Appraiser Penalty, to the OPR, and refer the suspected practitioner misconduct for appropriate disciplinary action.
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Circular No. 230, Section 10.53 states a referral should include all of the basic information, as well as the reasons supporting the Service employee's belief that the information submitted by the practitioner was below the expected standard.
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Mail or fax the Form 8484, the accompanying narrative, and any other supporting documents to:
Office of Professional Responsibility
SE:OPR
Attn: Misconduct Reports Desk
1111 Constitution Ave, NW
Washington, DC 20224
FAX: (202) 622–2207 -
Additional information about reporting suspected practitioner misconduct may be found on the OPR Intranet Website at http://nhq.no.irs.gov/OPR/ or go to irweb at irs.gov. OPR has established an e-mail address to answer questions about Circular No. 230 issues at OPR@irs.gov.
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Part A – Practitioner Information
Practitioner information must include the practitioner's name, mailing address, telephone number, fax number, social security number, and CAF number. Indicate whether the practitioner is an attorney, certified public accountant, enrolled agent, or enrolled actuary.
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Part B – Evidence of Practice before the IRS
If available, attach a copy of the Form 2848, Power of Attorney and Declaration of Representative, or an IDRS CAF printout to the Form 8484. If neither a copy of the Form 2848 nor a CAF printout is available, but the employee has personal knowledge of the practice, provide the following statement, "I dealt with this practitioner during (year) regarding a collection matter. The Form 2848 was not put on the CAF and I do not have access to the closed case file." OPR must be able to accurately identify and locate the tax practitioner in order to process the referral and establish proof of practice before the Internal Revenue Service.
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Part C – Explanation of Suspected Misconduct
Complete and attach a narrative to the Form 8484. The narrative should be detailed enough to allow the OPR to give the practitioner fair notice of the suspected misconduct. It should list all significant events that illustrate the inappropriate conduct in chronological order, explain how the conduct impacts on the administration of the tax laws, as well as any other supporting information that will establish a pattern of abuse. It should include appropriate quotations from the case history that would support the alleged misconduct. If applicable, hand-written material should be transcribed. The narrative should be specific and should include: who, what, when, where, and why.
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Part D – Contact Person and Address
The contact person is not necessarily the person with first-hand knowledge of the suspected misconduct. Rather, the contact person may be an Area employee responsible for collecting misconduct reports and submitting them to the OPR. OPR will direct questions concerning the referral to the contact person.
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Part E – Management Approval
While OPR does not require any particular level of management approval that is required, referrals made by OIC employees, the referral should be reviewed and approved by field Group Managers or Offer Examiner Unit Managers (COIC) before documents are sent to the OPR.
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Part F – Office of Professional Responsibility (OPR) Acknowledgement of Report
Upon receiving the Form 8484 and the corresponding narrative, OPR will complete Part F and return a copy to the contact person.
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The following are potential fraud warning signs most identifiable during an interview:
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Failing to keep proper books and records in a business or profession.
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No records, poorly kept records, or attempts to falsify or alter records.
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Destroying books and records without plausible explanation or refusal to make certain records available.
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Extent of taxpayer's control of sales and receipts and the apparent unwillingness to delegate this function to employees.
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Engaging in illegal activities.
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Personal living standard and asset acquisition is inconsistent with reported income.
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Indications that valuable assets belonging to the taxpayer are being acquired and held in the name of others.
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Self-serving statements with no documented proof.
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Repeated procrastination on the part of the taxpayer in making and keeping appointments.
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Hasty agreement to adjust and undue concern about immediate closing of the case may indicate a more thorough examination may be necessary.
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The following are potential fraud warning signs most identifiable during verification of the financial statement:
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Uncooperative attitude displayed by:
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Not providing requested information
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Refusal to make certain records available
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Not furnishing adequate explanations for discrepancies or questionable items
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Trying to conceal a pertinent fact or record.
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Failing to deposit all receipts to the business account.
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Use of nominees or false names.
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Unusual depletion of assets shortly before filing an offer.
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Inflated salaries, payment of bonuses or cash withdrawals by officers, directors, shareholders, or other insiders.
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Transfers of property to insiders, shareholders, or relatives shortly before filing the offer.
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Payoff of loans to directors, officers, shareholders, relatives, or other insiders shortly before filing of the offer.
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Complicated corporate structures and relationships.
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Undervaluing of assets.
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Overstatement of liabilities.
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The fraud indicators below can fall into any of the categories in paragraphs (1) and (2) above:
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Making false, misleading, and inconsistent statements.
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Using currency instead of bank accounts or making large expenditures in currency.
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Concealment of bank accounts and other property.
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If indications of fraud are identified, follow established procedures for preparing a referral to Criminal Investigation and suspend the offer investigation in the following manner:
If Criminal Investigation… Then… Rejects the referral Investigation of the OIC may continue. Accepts the referral No contact will be made with the taxpayer regarding the status of the offer until Criminal Investigation informs the taxpayer of the criminal investigation and /or authorizes the OI to contact the taxpayer. -
Once the taxpayer has been notified by CI of the pending investigation and Collection has been authorized to contact the taxpayer, the OI will advise the taxpayer of the following:
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The OIC could be returned because other investigations are pending that may affect the liability sought to be compromised or the grounds on which it was submitted
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Action on the OIC will be suspended pending the outcome of the criminal investigation
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The offer could be withdrawn.
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