Both COD and COS applications are complex and require professional representation to navigate the process through the IRS Advisory Unit.
For a COD, the business needs to provide:
● Bill of Sale,
● Appraisal,
● Confirmation of Priority Liens (e.g., existing mortgages or notes on the asset),
● HUD form, and
● Verification of a third-party transaction.
A COS application requires the same documentation as COD, but in addition, a third-party lender must be secured who is willing to accept a loan position that carries a subordinated IRS lien. This can be challenging in many cases.