Ezel / IRS Rulings / 200941028

CCA 200941028: A settlement may assess less than the statutory deficiency

Number
200941028
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Interest on Overpayments (Interest v. No Interest)
Topics
Procedure, penalties, and administration
Code sections
§ 6611, § 6110
Ruling dated
September 1, 2009
Publicly released
October 9, 2009
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 2009, 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 2009
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

This Chief Counsel advice considers whether the IRS may assess less than the amount stated in a statutory notice of deficiency. It concludes that doing so is legally permissible, but an IRS-initiated adjustment without a closing agreement or another signed document can trigger the special interest rules in section 6611(e)(3). When a settlement involved a concession or negotiation, the advice considers a closing agreement appropriate.

Ruling snapshot

  • Question: May the IRS assess less than the amount in a statutory notice of deficiency, and what documentation may be appropriate?
  • Outcome: Advice given.
  • Key authorities: IRC §§ 6611(e)(3), 6110(k)(3).

Full text (IRS public release)

ID: CCA_2009090116243747 Number: 200941028
Release Date: 10/9/2009
Office: ----------------------------
UILC: 6611.00-00

From: ---------------------
Sent: Tuesday, September 01, 2009 4:24:46 PM
To: ------------------------
Cc:
Subject: RE: Assessment on Defaulted SND case

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The short answer is that yes, it is legally permissible to assess less than the amount in the statutory notice of deficiency.

However, doing so without entering into a closing agreement or having some kind of signed document means the assessment is based on an IRS initiated adjustment. Special interest rules apply (section 6611(e)(3)).

If there has been any kind of concession/negotiation in order to get to the settlement it seems appropriate to enter into a closing agreement.

Let me know if you need anything further,

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