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COAP Application Review

When a LCSA receives a COAP application package, the LCSA determines if that particular LCSA has case management authority and can process an offer in compromise. If not, the LCSA is to assist the NCP in applying to the LCSA with case management authority. If so, the LCSA is to review the application and the supporting documentation for completeness and inclusion of all necessary information.

The NCP is responsible to provide a complete application containing all of the supporting documentation the LCSA needs to verify the NCP’s financial, asset, expenses, dependant, and hardship claims. If the application is incomplete, or lacks adequate supporting documentation, the LCSA is to contact the NCP by telephone, or in writing.

If the NCP fails to respond to requests for additional information necessary to complete the review process, the application can be denied for “failure or refusal to provide information necessary to process the case.” The LCSA will send a denial letter notifying the NCP that the application has been denied. The NCP will not be eligible to re-apply for a compromise for one year from the date of the denial letter.

Prior to processing a COAP application the LCSA is to consider whether COAP is the best or only action appropriate to case management. Alternate actions LCSAs consider include, but are not limited to:

  1. Compromise of Assigned Arrearages - Family Reunification Program (AB 1449). For more information, see California Code of Regulations, Title 22, Division 13, Chapter 9, Article 6.
  2. Set aside of a presumed income order. For more information, see CSS Letter 03-18 (October 1, 2003).
  3. Review and adjustment of a child support order. For more information, see CSS Letter 04-09 (May 6, 2004).
  4. Case closure. For more information, see Title 22, Division 13, Chapter 8.

LCSAs may initiate multiple case management procedures. For example, a case established using presumed income might qualify for a set aside. When the order is set aside, the NCP may qualify for a compromise of arrears. In these situations, the LCSA initiates all appropriate actions, beginning with the most viable. If it is determined that COAP is not an option, the LCSA sends the NCP a Notice of Denial of Request for Compromise of Arrears, indicating in the “other” checkbox that COAP is not the appropriate remedy. The LCSA also informs the NCP of how the LCSA will proceed with the case. If it is determined that COAP is one of several actions needed, all other actions are completed prior to approval of the offer in compromise.1

Once the COAP application is complete and the NCP has documented their claims the LCSA enters the NCP’s information into either the COAP automated system or the COAP manual process workbook and the arrears repayment and compromise is determined automatically. Compromises are to be in the best interest of the State, in any circumstances where the LCSA is able to collect more in a lump sum than is indicated by the system or workbook, the repayment will be the greatest amount that can be collected.

COAP provides for basic deductions from an NCP’s income and some assets. These deductions include basic living costs such as; housing costs, utilities, food; as well as, a liquidation cost for capital assets and a limited home equity. These deductions are applied automatically during the calculation of the compromise to ensure consistency statewide.

 

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1 Example: Child support obligations are integrated into compromises of arrears agreements. Therefore, any necessary review and adjustment of a child support order is completed prior to the LCSA or Department of Child Support Services (DCSS) approving an offer in compromise. NCPs are kept apprised that the processing of their COAP application is delayed by the review and adjustment of their child support order.