CCA 201123034: Three-year assessment limit applies to the section 6695A appraiser penalty

Plain-English summary

This Chief Counsel Advice addresses the limitations period for the penalty imposed under IRC § 6695A on appraisers. It concludes that IRC § 6696(d) expressly requires the Service to assess that penalty within three years after the related return or refund claim was filed. The advice explains that Congress added the § 6695A penalty to the three-year limitations provision in the Tax Technical Corrections Act of 2007. It also states that earlier advice concluding there was no limitations period was drafted before the amendment and is no longer correct.

Ruling snapshot

• Question: What assessment limitations period applies to the IRC § 6695A appraiser penalty?
• Outcome: Advice given.
• Key authorities: IRC §§ 6695, 6695A, 6696(d); Pension Protection Act of 2006; Tax Technical Corrections Act of 2007.

Full text (IRS public release)

ID: CCA_2011051307555350 Number: 201123034
Release Date: 6/10/2011
Office: --------------
UILC: 6695.00-00, 6696.02-00

From: -----------------------
Sent: Friday, May 13, 2011 7:55:55 AM
To: --------------------------------------------
Cc:
Subject: Assessment Period of Limitations for Section 6695A Penalty

Section 6696(d) of the Internal Revenue Code expressly provides that the Service must assess the section 6695A appraiser penalty within three years after the return or claim for refund with respect to which the penalty is assessed was filed. When section 6695A was first enacted in the Pension Protection Act of 2006, section 6696(d)(1) did not originally provide a three year period of limitation on assessment for the section 6695A penalty as it did for the penalties under sections 6694(a) and 6695. Congress, however, amended section 6696(d) in the Tax Technical Corrections Act of 2007 to specifically include this three year period of limitations on assessment for the section 6695A penalty. You inquired into the advice provided in AM 2007-017, which stated that there was no period of limitations applicable to the assessment of a penalty under section 6695A. The advice provided in AM 2007-0017 was drafted prior to the 2007 amendment to section 6696(d)(1) and, therefore, is no longer correct advice.