CCA 200851106: Which part of the manual sets the interest assumption, Exam or Appeals
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Plain-English summary
This is a short internal email about a form, and almost all of its content is procedural rather than legal.
The index code assigned to it is section 6405, which requires the Service to report large refunds and credits to the Joint Committee on Taxation and to wait before paying them. The Internal Revenue Manual part cited, the 4.36 series, is the manual's treatment of that program, and Exhibit 4.36.3-3 is one of the standard documents used in it.
The substantive statement is a single sentence. IRM 4.36.3.7.4 provides that interest should be based on the anticipated time to complete the examination and the current interest rate. That is a projection rather than a computation. When a refund case is still open, nobody knows the final payment date, so the manual tells the examiner to estimate the remaining exam time and apply the rate in effect rather than leave the interest figure blank or guess at it.
The rest of the message is the writer's account of where the drafting stands. Two things in it are worth noticing. The writer expresses surprise that the taxpayer appears to be drafting the document, which in an exchange about a Service exhibit is a real objection rather than an aside. And the writer had questioned why the draft cited the Appeals portion of the manual rather than the Examination portion, and had seen no rewrite since raising it. The manual's instructions differ by function, so a document that quotes the wrong branch can carry the wrong standard into a case.
Nothing here is resolved. The email records an unanswered question, not an answer to one, and it is included in the section 6110 release along with the writer's apology for having lost track of the thread.
This is a clean digital release rather than a scan, so no OCR correction was needed. Kept as released: "interest should be the based on the anticipated time," with a stray "the"; "and I Have not exchanged e-mails," capitalized mid-sentence; and the subject line "RE: Exhibit 4.36.3-3," which shows this is a reply within an exchange that is not part of the release.
Ruling snapshot
- Question: What interest assumption applies to the exhibit in question, and is the draft citing the correct part of the Internal Revenue Manual?
- Outcome: Advice given. IRM 4.36.3.7.4 provides that interest should be based on the anticipated time to complete the examination and the current interest rate. The writer questioned why the draft cited the Appeals portion of the manual rather than Examination's, noted surprise that the taxpayer appeared to be drafting the document, and had seen no rewrite.
- Key authorities: IRC section 6405; IRM 4.36.3.7.4; Exhibit 4.36.3-3.
Full text (IRS public release)
ID: CCA-102112-08 Number: 200851106
Office: ------------- Release Date: 12/19/2008
UILC: 6405.00-00
From: --------------------------
Sent: Thursday, October 02, 2008 11:27 AM
To: ------------------
Subject: RE: Exhibit 4.36.3-3
-----------
IRM 4.36.3.7.4 provides that interest should be the based on the anticipated time to complete the exam
and the current interest rate. -------- and I Have not exchanged e-mails in some time; if I understood
correctly and to my surprise, the TP is drafting the document. I questioned why they were citing to the
Appeals portion of the IRM and not Exam’s, but I don’t recall seeing a re-write since then.
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