Ezel / IRS Rulings / 201246036

Chief Counsel advises including all adjustments in an explanation of items

Number
201246036
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Assessment Authority
Topics
Procedure, penalties, and administration
Code sections
§ 6201
Ruling dated
June 26, 2012
Publicly released
November 16, 2012
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 2012, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2012
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
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 an IRS explanation of items should reflect all adjustments, including adjustments that formed the basis for a restitution calculation. Explaining every adjustment shows how the total tax liability was determined, and relationships between adjustments should be explained for clarity. The advice also states that if a taxpayer challenges an adjustment agreed to in a criminal case, the Service may raise issue preclusion and an argument under IRC § 6201(a)(4)(C). Including the adjustment in the report would not hamper or diminish those defenses.

Ruling snapshot

  • Question: Should an explanation of items include every adjustment, including adjustments used in calculating restitution?
  • Outcome: Advice given
  • Key authorities: IRC § 6201(a)(4)(C)

Full text (IRS public release)

ID: CCA_2012062610050246 Number: 201246036
Release Date: 11/16/2012
Office:
UILC: 6201.00-00

From: -------------------
Sent: Tuesday, June 26, 2012 10:05:24 AM
To: -----------------------------------------------
Cc: ---------------------------
Subject: RE: New issue - Explanations of Adjustments

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

All of the adjustments, including the adjustments that were the basis for the restitution calculation, should be reflected on the explanation of items. Explaining all of the adjustments will show how the total tax liability was determined. Further, there may be instances when one adjustment is based off of another and will need to be explained for clarity. If the taxpayer challenges an adjustment that was agreed to in the criminal case, then the Service can raise issue preclusion and a section 6201(a)(4)(C) argument. Including the adjustment on the report will not hamper or diminish these defenses. --------------
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