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OIC Guidelines

Procedures

  1. Independent administrative review of a rejection of an offer in compromise is available upon request by a taxpayer. An independent administrative review will set aside a rejection of an offer in compromise only upon clear and convincing evidence presented by the taxpayer that the rejection was the result of fraud, adoption of a wrong principle or error of law by Treasury.
  2. A taxpayer may request an independent administrative review of a rejected offer in compromise by filing Request for Independent Administrative Review of Rejected Offer in Compromise (Form 5186) with Treasury’s Office of Legal Affairs no later than 30 calendar days after the date of Treasury’s rejection letter. A request for independent administrative review will be deemed timely filed if it bears a postmark date before the 30 calendar-day deadline.
  3. If a taxpayer requests independent administrative review, the taxpayer must state with particularity the grounds for the taxpayer’s objections and must specify whether they relate to doubt as to liability, doubt as to collectability, or grant of a federal Offer in Compromise by the Internal Revenue Service for the same tax periods.
  4. An independent administrative review will be based upon the record established by Treasury in the course of considering and rejecting an offer in compromise. Such record will include any information submitted by the taxpayer in connection with the offer in compromise as well as information otherwise available to and used by Treasury in its consideration. An independent administrative review will not consider any issue, information, or documentation that was not raised or submitted by the taxpayer or Treasury during the determination process.
  5. An independent administrative review will treat as conclusive the disposition of any question of fact based upon the record established by Treasury in the course of rejecting an offer in compromise, so long as the disposition is supported by competent, material, and substantial evidence on the record. Questions of law will be reviewed de novo.
  6. If an independent administrative review determines that Treasury erred in rejecting an offer in compromise, the independent administrative reviewer will overturn that decision and notify the taxpayer and any designated third-party representative. The independent administrative reviewer will direct the Treasury division that evaluated the offer in compromise to accept the offer in compromise and to issue to the taxpayer and any designated third-party representative a Notice of Acceptance of Offer in Compromise letter accepting the offer in compromise.
  7. If an independent administrative review upholds Treasury’s rejection of an offer in compromise, the independent administrative reviewer will send a letter to the taxpayer and any designated third-party representative stating the decision to uphold Treasury’s rejection. The Office of Legal Affairs will notify the Collection Services Bureau of the independent administrative review decision, and Treasury will reinstitute collection of the tax debt beginning with the date of the letter upholding the rejection.
  8. A decision of the independent administrative review is final and may not be appealed to the Michigan Tax Tribunal or to any court.