CCA 201005048: An original return is required for an interest-free section 6205 adjustment

Plain-English summary

This internal IRS Chief Counsel advice addresses when an employment-tax adjustment may receive interest-free treatment under IRC § 6205. It states that an original return must have been filed before an interest-free adjustment can be made because there is otherwise no return to adjust. The advice identifies an exception for employers that failed to treat any workers as employees and therefore filed no original return. A return prepared under IRC § 6020(a) may satisfy the original-return requirement, allowing later adjustments to qualify for interest-free treatment.

Ruling snapshot

• Question: Must an original return be filed before an interest-free adjustment under § 6205 can be made?
• Outcome: Advice given.
• Key authorities: IRC §§ 6205 and 6020(a).

Full text (IRS public release)

ID: CCA_2010011215522617 Number: 201005048
Release Date: 2/5/2010
Office: -----------------------------
UILC: 6205.00-00

From: ------------------
Sent: Tuesday, January 12, 2010 3:52:28 PM
To: -----------------------
Cc: ---------------------------------------------
Subject: RE: Section 6205 question

Hi --------- -

An original return must be filed before an interest-free adjustment under §6205 can be made (i.e., if no original return was filed, there’s nothing to adjust). There is an exception, as you point out below, for ERs who have not filed an original return because they failed to treat any workers as EEs. A return filed under
§6020(a) could satisfy the requirement that an original return was filed such that any adjustments made to that return could qualify for interest-free treatment.

Hope that helps. Let me know if you have further questions.