Interest accrues from the initial penalty notice date

Number

201104043

Outcome

Advice

Document type

Chief Counsel Advice

IRS subject

Penalty for Failure to Include Reportable Transaction Information with Return

Topics

Procedure, penalties, and administration

Code sections

§ 6707A, § 6601

Ruling dated

December 29, 2010

Publicly released

January 28, 2011

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 2011, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

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 advised that interest on an IRC § 6707A penalty should accrue from the initial notice and demand date, rather than from the date a later recalculated penalty is issued. The advice states that the penalty generally has a 21-calendar-day payment period, with a 10-business-day rule for penalties of at least $100,000. If legislation reduces or abates part of the penalty, the related interest on that portion should also be abated.

Ruling snapshot

Question: From what date should interest accrue on a recalculated IRC § 6707A penalty?
Outcome: Advice given.
Key authorities: IRC §§ 6707A and 6601(e)(2)(A)

Full text (IRS public release)

ID: CCA_2010122915474116 Number: 201104043
Release Date: 1/28/2011
Office: --------------
UILC: 6707A.00-00

From: ----------------------
Sent: Wednesday, December 29, 2010 3:48:10 PM
To: ------------------------
Cc: ---------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------
Subject: RE: TWO QUESTIONS ON 6707A RECALCULATIONS

If the section 6707A penalty is not paid within 21 calendar days from the date of the notice and demand for payment of the penalty, interest shall be imposed on the penalty amount for the period from the date of the notice and demand to the date of payment. I.R.C. § 6601(e)(2)(A). If the penalty equals or exceeds $100,000, interest will begin to accrue on the date of the notice and demand unless the penalty is paid within 10 business days of the notice and demand. Interest should accrue from the initial date of notice and demand, rather than the date of the recalculated penalty. Of course, if any portion of the penalty is abated as a result of the legislation reducing the penalty, the related interest on that abated portion should also be abated.

Please let me know if you have any other questions.

------------------------
--------------
-------------------

What does the Code say today, for your facts?

This advice was written for IRS staff and cannot be cited. Ezel checks the current Internal Revenue Code and IRS guidance against your situation, with citations.

Opens in Ezel Pro.

Checks the law as it stands today, not only this page
Cites every source it relies on, so you can verify it
Chat, drafting and research in one workspace