Ezel / IRS Rulings / 200012080

CCA 200012080: Condemnation award interest belongs on Form 1099-INT

Number
200012080
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Payments By United States Or A State; Exceptions
Topics
Procedure, penalties, and administration
Code sections
§ 6041, § 6049
Ruling dated
December 28, 1999
Publicly released
March 24, 2000
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2000, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2000
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel corrected an earlier memorandum about information reporting for the interest portion of a real property condemnation award. The earlier advice said that the interest did not meet section 6049's definition and that payments of $600 or more should be reported on Form 1099-MISC under section 6041. This memorandum kept the section 6049 conclusion but pointed to a special rule in the Form 1099-INT instructions. Under that rule, such interest of $600 or more is reported on Form 1099-INT, so the earlier advice was modified.

Ruling snapshot

  • Question: Which Form 1099 reports a condemnation award's interest component when it is at least $600?
  • Outcome: Advice given: use Form 1099-INT under the form's special instruction.
  • Key authorities: IRC §§ 6041 and 6049; Form 1099-INT instructions.

Full text (IRS public release)

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, DC 20224
December 28, 1999
OFFICE OF
CHIEF COUNSEL
CC:DOM:IT&A:2
Number: 200012080
Release Date: 3/24/2000
Index Nos: 6041.08-00
SPR-119779-99
6049.03-00

MEMORANDUM FOR BLAKE FERGUSON
ASSISTANT DISTRICT COUNSEL
NORTH - SOUTH CAROLINA DISTRICT

FROM: Lewis J. Fernandez
Deputy Assistant Chief Counsel
(Income Tax & Accounting)

SUBJECT: Information Reporting - Condemnation of Real Property

Our prior memorandum to you (October 4, 1999; CC;DOM:IT&A:2; SPR-110473-99, 199947029) concluded, in part, that the interest component of a condemnation award did not meet the definition of interest under § 6049 of the Internal Revenue Code.
Thus, our memorandum further concluded that a payment to a person of such interest of $600 or more in a taxable year should be reported under § 6041 on Form 1099- MISC.

However, under a special rule set forth in the instructions for Form 1099-INT, interest of $600 or more paid to any person in a taxable year and not meeting the criteria of § 6049 is reported on Form 1099-INT. Accordingly, our prior memorandum is modified.

If we can be of further assistance, please contact CC:DOM:IT&A:2 at 202-622-4920.

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