Mitigation does not reopen an expired refund-claim year on these facts

Plain-English summary

Chief Counsel Advice addressed a potential refund claim for a closed taxable year. It stated that the statute of limitations had expired and that the mitigation provisions in IRC sections 1311 through 1314 did not apply. The advice explained that the required determination and an applicable section 1312 circumstance of adjustment were absent on the stated facts.

Ruling snapshot

• Question: Could the mitigation provisions allow a refund claim for the closed taxable year?
• Outcome: advice given
• Key authorities: IRC §§ 1311-1314, including 1311(b)(2)(B), 1312(4), and 1313(a).

Full text (IRS public release)

ID: CCA_2011120111271847 Number: 201149027
Release Date: 12/9/2011
Office: ----------------------------
UILC: 1312.04-00, 1311.02-00

From: ---------------------
Sent: Thursday, December 01, 2011 11:27:20 AM
To: --------------
Cc:
Subject: mitigation

I am a little uncomfortable with your first paragraph. I'm providing the following language for your
consideration. Please let me know if you would like to discuss this further.

This letter is in response to your inquiry regarding a potential refund claim for the ---------
taxable year. The statute of limitations for claiming a refund for the ------- year has
expired. Therefore, the year is closed. While in some circumstances, the mitigation
provisions found in I.R.C. §§ 1311-1314 can provide an exception to the statute of
limitations, those circumstances are not applicable here.

In order for mitigation to apply, a determination, as defined by section 1313(a) must
exist. The determination is generally a Court opinion, a closing agreement, or a final
disposition on a claim for refund. That determination must be described by one of the
circumstances of adjustment listed in section 1312. It is our understanding that for
taxable year -------, [taxpayer] did not claim a deduction available at the time. This
deduction was not claimed in another year and is not being disallowed. Therefore,
paragraph (4) of section 1312 does not apply. There are no other circumstances of
adjustment that would apply to these facts. Additionally, were section 1312(4) to apply,
section 1311(b)(2)(B) requires that the year of the claim, -------, be open on the date that
the claim was first made for the year that is the subject of the determination (------- or ----
-------). It does not appear this requirement has been satisfied. While there are
additional requirements that must be met in order for mitigation to apply, it does not
appear necessary to go into further detail at this time.