CCA 201223019: IRS clarifies an excise-tax overpayment credit

Plain-English summary

Chief Counsel advice corrected an earlier analysis concerning whether an excise-tax overpayment could be credited against another excise-tax liability. The advice states that if the taxpayer paid the liability before the assessment period expired, Rev. Rul. 85-67 would apply, the payment would not be treated as an overpayment for purposes of § 6401(a), and § 6514(b) would not bar the credit. On that basis, § 6402(a) would permit the offset even if the liability had not been assessed.

Ruling snapshot

• Question: Could an excise-tax overpayment be credited against another excise-tax liability when the liability was paid within the assessment period?
• Outcome: Advice given, correcting an earlier analysis based on an incorrect factual assumption.
• Key authorities: IRC §§ 6401, 6402, and 6514; Rev. Rul. 85-67

Full text (IRS public release)

ID: CCA-210240-12 Number: 201223019
Release Date: 6/8/2012
Office: ----------------------------
UILC: 6402.00-00

From: -------------------
Sent: Friday, February 10, 2012 2:40 PM
To: ------------
Cc: ----------------------------
Subject: Lewis v. Reynolds

Hi ------ - looking at this again, I either misread or misunderstood your original facts. I didn't realize payments were made within the ASED period. Thus, I stated below that "your question does not involve a payment of the underpaid excise tax made within the assessment period so Rev. Rul. 85-67 is inapplicable."

If TP did pay the tax before the ASED went, then it would seem that 85-67 would apply. The payment would not be considered an overpayment for purposes of section 6401(a), and section 6514(b) would not prohibit the credit. As such, 6402(a) would apply to permit offset of an overpaid excise tax of one type against a liability for another excise tax type, where the taxpayer paid the liability within the ASED, even if we never assessed that liability. The analysis in my second paragraph below is incorrect, as it is based upon the assumption that there was no payment made within the assessment period.

I apologize for the confusion.