CCA 200913017: A demand for TEFRA tax payment was a computational-adjustment notice

Plain-English summary

Chief Counsel explained that a notice of computational adjustment is effectively a bill for tax liability resulting from TEFRA procedures. A notice and demand for payment states that amount and therefore qualifies as the computational-adjustment notice as a matter of law. The taxpayer generally had six months after the IRS sent the Notice of Income Tax Examination Changes to challenge the computation. The advice cites sections 6155, 6303, and 7521 as authority for sending the demand for payment.

Ruling snapshot

• Question: What constitutes a notice of computational adjustment after a TEFRA proceeding?
• Outcome: Advice given: the bill and demand for payment itself constituted the notice.
• Key authorities: IRC §§ 6155, 6231(a)(6), 6303, 7521.

Full text (IRS public release)

ID: CCA-627429-08 Number: 200913017
Release Date: 3/27/2009
Office: --------------
UILC: 6231.06-00

From: -------------------
Sent: Fri 6/27/2008 4:29 PM
To: ------------------
Cc: ------------------------------------------------------------------------------------------------------------------- Subject: RE: Notice of computational adjustment

A notice of computational adjustment is nothing more than a bill. See I.R.C. 6231(a)(6)("computational adjustment" is the amount of tax liability arising under the TEFRA procedures). The taxpayer generally has 6 months from the date we send the bill ("Notice of Income Tax Examination Changes") to challenge the computation. Section 6155, 6303 and 7521 provide for our sending a bill (demand for payment). The notice of demand for payment, as a matter of law, constitutes a notice of computational adjustment since it constitutes a notice of "the amount of tax liability" arising from the TEFRA procedures.