CCA 201049031: A taxpayer may make a deposit of disputable tax before an audit

Plain-English summary

Chief Counsel Advice considers whether the IRS may accept a deposit of disputable tax before the taxpayer has been audited. The advice agrees that there is disputable tax and that the taxpayer should follow the procedures in sections 4.01 and 7.02 of Rev. Proc. 2005-18. It also states that the amount of disputable tax may be easier to identify after the IRS issues a 30-day letter, but it does not say that an audit must occur before the deposit can be accepted.

Ruling snapshot

• Question: May the IRS accept a deposit of disputable tax when the taxpayer has not yet been audited?
• Outcome: advice given
• Key authorities: IRC § 6603; Rev. Proc. 2005-18, sections 4.01 and 7.02.

Full text (IRS public release)

ID: CCA_2010102511254539 Number: 201049031
Release Date: 12/10/2010
Office: ----------------------------
UILC: 6603.00-00

From: -------------------------
Sent: Monday, October 25, 2010 11:52:32 AM
To: ------------------
Cc:
Subject: RE: IRC 6603 & Rev Proc 2005-18

I agree there is a disputable tax and I agree that taxpayer should follow the procedures under section 4.01 and 7.02 of Rev Proc 2005-18.

Perhaps it's because I see so many of these cases, but it would never have occurred to me that any body would be in any doubt about whether we would accept a deposit where the taxpayer has not yet been audited. It's just easier to identify the amount of the disputable tax after the 30 day letter has been issued.