When We File an OIC

True, just Form 656-L will suffice, when compromising based upon doubt as to liability. But if Appeals asks for a Form 433-A as well, that’s not abuse of discretion if no OIC is proffered. Nuntiya Sripa, T. C. Sum. Op. 2023-26, filed 8/7/23 is an object lesson for Representatives (designees under Form 2848).

Nuntiya’s Rep managed to work with TAS to knock out a couple years (hi, Judge Holmes), but IRS wouldn’t fold another, and gave Nuntiya a SNOD. For whatever reason, she never petitioned the SNOD, so ACSU sent Nuntiya a CP90, which got a Letter 12153 from Nuntiya.

Nuntiya’s Rep claimed Nuntiya never got the SNOD, but a copy was attached to the 12153, and IRS had the proof of mailing (USPS Form 3877) with matching address.

All the Rep did at Appeals was contest liability. Too late. Judge Christian N. (“Speedy”) Weiler finds the request for the 433-A is harmless error, as neither Nuntiya nor her Rep submitted a 656, and never requested any collection alternative at the CDP. Had they submitted a 656-L without the Form 433-A, and had the SO bounced the OIC on that ground only, maybe they’d have had a case.

“An Appeals officer does not abuse her discretion when moving forward with the case after a taxpayer has been given an adequate amount of time to submit requested documents. Here, SO M granted petitioner a reasonable amount of time to submit Form 656, but petitioner elected to not pursue an offer-in-compromise. Petitioner has not asserted, nor is there any basis in the record for the Court to conclude, that SO M abused her discretion in sustaining the collection action.” T. C. Sum. Op. 2023-26, at p. 8.

Reps, warn your taxpayers: any piece of paper they get from IRS goes to you immediately. And if you’re fighting liability, a Form 656-L with a nominal offer might give you a better shot than TAS.