CCA 1211024: Counsel approves a procedure for assigning a jointly issued refund

Plain-English summary

Chief Counsel analyzes a proposed procedure for assigning a refund that the IRS would otherwise issue jointly to two claimants. The advice states that a Title 31 assignment can be used if the assignment document is properly executed, witnessed, and certified, and if the refund allowance letter serves as the warrant for payment. The proposed document would assign the claimants' interest in the refund, address overpayment interest under IRC § 6611, protect against duplicate payment, and limit later dealings to the original claimants. The advice also notes that the assignment document does not resolve the parties' rights and obligations among themselves.

Ruling snapshot

• Question: May the IRS implement an assignment of a jointly issued refund using the proposed assignment document?
• Outcome: Advice given.
• Key authorities: IRC §§ 6402, 6611; 31 U.S.C. § 3727; IRM 4.4.3.6

Full text (IRS public release)

ID: CCA-422170-11 Number: 201211024
Release Date: 3/16/2012
Office: --------------
UILC: 6402.03-01

From: -------------------
Sent: Friday, April 22, 2011 5:06 PM
To: ----------------
Cc: ----------------------------
Subject: RE: RE: [ --------------------------]

---------the Title 31 assignment procedure - with the witnesses and certification - involves a lot of
work because the procedure is set up to cover the assignment of government contracts and just not
something as simple as protecting against possible multiple payment of claims. But if it's believed this
makes collections more secure, legally the assignment can be done and I've drafted an assignment
document that should cover it (attached).
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As indicated by the draft assignment document, the warrant for payment of the claim (Title 31) is the letter
allowing the refund, which I take it, is the Letter 570 (DO), Claim Allowed in Full. That letter is prepared
by the RA and signed by the Examination Group Manager.. Usually the letter is forwarded to Centralized
Case Processing (CCP) for mailing. ------------------------------------------------------------------------------------------

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After the assignment document is executed, the RA would forward it the same way the RA would forward
the allowance letter to have a refund check issued, which I take it is through CCP. The process seems
comparable to that in IRM 4.4.3.6 (02-08-1999) Refunds to Other Taxpayers, which cover assignments by
operation of law (e.g., reorgs). In particular, see IRM 4.4.3.6.1 (02-08-1999) Examiner’s
Responsibilities, which directs an RA to provide documentary evidence to permit refunds to be made.

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I'm in til 5:30 today and all next week and you can call me at --------------------

ATTACHMENT

                                                        Assignment

 Assignment   made      ____________[date],    by    ____________     ("Assignor")   of
 ____________[street address], ____________[city], ____________[state] and by
 ____________ ("Assignor") of ____________[street address], ____________[city],
 ____________[state] to ____________, __________ [Title] of _________      ("Assignee")
 ____________[street address], ____________[city], ____________[state].

 Letter 570 (DO), Claim Allowed in Full, dated ___________ shows that the Assignors are
 entitled to receive a refund in the amount of $___________ from the Internal Revenue
 Service. A copy Letter 570 (DO) is attached to this assignment. The Letter 570 (DO) was
 issued by the Internal Revenue Service after it considered the Assignors’ claim dated
 _________regarding their individual income tax liability for the taxable year ____________.
 The Letter 570 (DO) is the warrant for payment of the claim for purposes of the Anti-
 Assignment Act, 31 U.S.C. § 3727.

 Assignors assign to Assignee all of Assignors’ interest in the $____________ refund.

 This assignment document serves the following purposes:

      (1) documents that the Service issued a refund jointly to Assignors pursuant to section
      6402 of the Internal Revenue Code through the execution of this assignment document
      and that pursuant to the request of Assignors, the Internal Revenue Service will
      implement the assignment of the refund to Assignee. If this assignment document is not
      executed, a refund check will be issued jointly in the names of ___________ and
      _______________; and

      (2) establishes that overpayment interest will be allowed under section 6611(b)(2) of the
      Internal Revenue Code to a date (to be determined by the Internal Revenue Service)
      preceding the date of the execution of this document by not more than 30 days;

      (3) protects the government from possible multiple payment of claims; Assignors’ have
      no right to request payment on the claim although different income tax claims may be
      made filed for the [_______] tax year to the extent that the period of limitations remains
      open; and

      (4) limits the government to deal with only the original claimants, the Assignors,
      regarding the claim. The Internal Revenue Service will not have any conversation with
      Assignee regarding the claim, the amount of the overpayment, or the amount of the
      refund; and

      (5) preserves the government’s right to take action against Assignors if it is later
      determined that the refund was erroneous.

This document does not address Assignors’ and Assignee’s reasons for the assignment and
does not address the rights and obligations of Assignors and Assignee among themselves.

By executing this document Assignors state that this assignment is made freely.

By executing this document Assignors state that the tax return information in the Letter 570(DO)
may be disclosed to the Assignee.

By executing this document Assignors and Assignee state that the official named below
answered any questions they had regarding assignment.

I have executed this assignment at __[designate place of execution], on
____[date].

___ ___
_______
[Signature] [Signature] [Signature]

Witnessed by: ___ Witnessed by:
___ Name
Name

Official certifying the assignment: ____ ____
Name Date

                                  Examination Group Manager
                                  Title

Attachment: copy of Letter 570(DO)