SECTION 5. OFFER-IN-

COMPROMISE CASES

.01 In general. Provided all facts are known by both parties, mediation in OIC cases is available for the following issues:

(1) The value of assets, including those held by a third party;

(2) The value of dissipated assets and what amount should be included in the overall determination of reasonable collection potential;

(3) A taxpayer’s proportionate interest in jointly held assets;

(4) Projections of future income based on calculations that do not involve current income;

(5) The calculations of a taxpayer’s future ability to pay when living expenses are shared with a non-liable person;

Bulletin No. 2014–53 1015 December 29, 2014

(6) Whether the taxpayer meets the criteria for deviating from national and/or local expense standards described in Internal Revenue Manual 5.15.1 and as set forth at http://www.irs.gov/Businesses/ Small-Businesses-&-Self-Employed/ National-Standards-Food-Clothing-and- Other-Items ;

(7) Other factual determinations, such as whether a taxpayer’s contributions into a retirement savings account are discretionary or mandatory as a condition of employment.

.02 Exclusions . Mediation is not available for OIC cases in which:

(1) The taxpayer has the ability to pay in full based on the unadjusted financial information submitted by the taxpayer, except when economic hardship exists;

(2) The taxpayer declines to amend or increase the offer without stating any specific disagreement with the valuations, figures, or methodology used by Appeals in determining reasonable collection potential;

(3) The disputed issue is explicitly addressed by IRS guidance or authority, including but not limited to regulations, published guidance, the Internal Revenue Manual, forms or instructions. For example, the instructions for Form 656 explicitly state that the IRS will not consider expenses for tuition for private schools, college expenses, charitable contributions, and other unsecured debt payments as part of the OIC expense calculation. Therefore, mediation is not available with respect to whether any of these expenses will be considered in evaluating the taxpayer’s offer;

(4) An OIC is submitted as an alternative to collection in a Collection Due Process or equivalent hearing case;

(5) The issue of liability was previously determined by Appeals;

(6) The case was worked solely at an Appeals Campus/Service Center site; or

(7) Delegation Order 5–1 requires a level of approval higher than that of the Appeals Team Manager, such as certain Effective Tax Administration offers or those in which a determination is made by Appeals that acceptance is not in the best interest of the government (see Policy Statement P–5–100 and IRM 5.8.7, Re- turn, Terminate, Withdraw, and Reject Processing ).