CCA 200939024: Refund freeze was not required before a trustee's request

Plain-English summary

An IRS attorney addressed whether the Service had to freeze tax refunds for 180 days so a Chapter 7 trustee could request turnover of the refunds. The attorney advised that the Internal Revenue Manual did not require a freeze before the trustee made a request. After a request, the Service would honor it for 180 days from receipt, or, if later, for 180 days from the return's due date.

Ruling snapshot

• Question: Did the IRS have to freeze tax refunds for 180 days before a Chapter 7 trustee requested turnover?
• Outcome: Advice given.
• Key authorities: IRM 5.9.6.1.3; Bankruptcy Code § 542.

Full text (IRS public release)

ID: CCA_2009072814242350 Number: 200939024
Release Date: 9/25/2009
Office: ----------------------------
UILC: 09.46.00-00

From: -----------------------
Sent: Tuesday, July 28, 2009 2:24:38 PM
To: --------------------
Cc: ---------------------------------------------
Subject: RE: Request for Local Rule Clarification

The IRM does not require the Service to freeze tax refunds for 180 days to give the Chapter 7 trustee an opportunity to request turnover. Per IRM 5.9.6.1.3, the Service has no obligation to freeze refunds until the trustee makes a request. Once a request is made the Service will honor such request for 180 days from date of receipt OR, if later, 180 days from the due date of a return.