Ezel / IRS Rulings / 200952042

CCA 200952042: Why certain taxpayers cannot amend returns after audit selection

Number
200952042
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Definition of Underpayment
Topics
Procedure, penalties, and administration
Code sections
§ 6664
Ruling dated
November 4, 2009
Publicly released
December 25, 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

Chief Counsel Advice discusses why taxpayers referred to as IC taxpayers cannot amend their returns after being selected for audit under the rationale described. The advice says that some IC taxpayers are not selected for audit in some years, which could allow them to take tax positions beyond reasonable bounds in the hope of avoiding an audit. It contrasts this with CIC taxpayers and compares post-selection amendments under Rev. Proc. 94-69 to withdrawing an audit-risk bet after the outcome is known.

Ruling snapshot

  • Question: Why are IC taxpayers not permitted to amend returns after being selected for audit under the stated rationale?
  • Outcome: Advice given
  • Key authorities: IRC § 6664; Rev. Proc. 94-69

Full text (IRS public release)

ID: CCA_2009110411000564 Number: 200952042
Release Date: 12/24/2009
Office: --------------
UILC: 6664.01-00

From: ------------------
Sent: Wednesday, November 04, 2009 11:00:11 AM
To: ------------------
Cc:
Subject: RE: Thanks For Morsels of Wisdom - Rev Proc 94-69 and IC Taxpayers ---------

I don't know that that was the only reason, but I think it played into the rationale.

Rationale:
Since IC taxpayers are not selected for audit in some years, they can play "audit roulette", i.e. take tax positions beyond reasonable bonds on the chance that they will not be selected for audit. (CIC taxpayers can not play audit roulette). For this reason, IC taxpayers can not amend returns once selected for audit. Allowing IC taxpayers to amend their returns after being selected for audit, pursuant to Rev. Proc. 94-69, is the equivalent of permitting audit roulette players to withdraw their bets - in the form of penalty - after the roulette ball falls into the audit pocket.

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