CCA 200512019: Counsel closed arbitrage rebate interest inquiry without an answer

Plain-English summary

An IRS manager asked whether future valuing an arbitrage rebate payment when computing a refund amounted to paying statutory interest. Chief Counsel said it could not answer without interpreting IRC § 148 and its regulations, which were outside that office's jurisdiction. The office closed the matter without deciding the interest question and directed future inquiries to the tax exempt bonds counsel office.

Ruling snapshot

• Question: Does future valuing an arbitrage rebate payment for a refund computation constitute statutory interest?
• Outcome: Advice: no substantive answer; the matter was closed and redirected.
• Key authorities: IRC § 148; Treas. Reg. § 1.148-3.

Full text (IRS public release)

Office of Chief Counsel

Memorandum
Internal Revenue Service

Number: 200512019
Release Date: 3/25/2005
CC:PA:APJP:B01
Third Party Communication: None
POSTN-160021-04
Date of Communication: Not Applicable

UILC: 148.00-00, 6611.00-00

date: February 16, 2005
to: Clifford J. Gannett
Manager, Tax Exempt Bonds Outreach, Planning and Review (SE:T:GE:TEB:O)

from: James Coffey Gibbons
Branch Chief, Administrative Provisions & Judicial Practice, Branch 1 (Procedure & Administration)

subject: Computation of Arbitrage Rebate Overpayment Eligible for Refund

This Chief Counsel Advice responds to your request for assistance. This advice may not be used or cited as precedent.

ISSUE

Does future valuing a rebate payment for purposes of computing rebate overpayment constitute the payment of statutory interest.

CONCLUSION

To answer your inquiry we must provide legal advice on section 148 and section 1.148-3 of the Income Tax Regulations. That section of the Code and regulations is not within our jurisdiction. Rather, it belongs to CC:TEGE:EOEG:TEB, which was unable to provide determinative assistance with respect to your precise question. Because we cannot answer your question outside of the context of section 148, we are closing this matter. Future inquiries involving future valuing rebate payment for purposes of computing rebate overpayment should be routed through CC:TEGE:EOEG:TEB.

POSTN-160021-04
2

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