CCA 1302025: Appeals may clarify an erroneous collection notice by letter after the petition period

Plain-English summary

Chief Counsel Advice addresses a collection due process notice of determination that incorrectly identified which of two assessments would be abated. The 30-day period for petitioning the Tax Court had expired, so Appeals could not issue an amended or revised notice under the cited internal procedure. The advice concludes that Appeals could send the taxpayer a letter explaining the error and stating that it would abate the later assessment, while remaining prohibited from abating the original assessment. It also discusses the refund limitation in section 6511(b)(2) and the abatement rules in section 6404. The released amounts are redacted.

Ruling snapshot

• Question: How may Appeals correct an erroneous collection due process notice after the 30-day Tax Court petition period has expired?
• Outcome: Advice given. Appeals may clarify the error by letter and abate only the assessment properly at issue.
• Key authorities: IRC §§ 6330, 6404, and 6511(b)(2); IRM Part 8.22.9.15(1).

Full text (IRS public release)

ID: CCA_2012092707292125 Number: 201302025
Release Date: 1/11/2013
Office: -------------
UILC: 6330.00-00, 6404.01-02

From: ----------------
Sent: Thursday, September 27, 2012 7:29:35 AM
To: -----------------
Cc: -------------------------------------------------------------------
Subject: RE: CDP Question

After discussing the matter with the Revenue Officer, we learned the following:

The $---- liability was reported and assessed several years ago and the ASED has long since expired. $--
----- was paid and $---- abated. The RSED has also expired on the $---- payment. The service then
reassessed the $----, but the authority to reassess was called into question during the CDP hearing at
issue. The estate and the Service now agree that the second assessment was invalid. Accordingly, this
second assessment needs to be abated. However, the Notice of Determination (NOD) erroneously
indicates that the initial $---- assessment will be abated, as opposed to the subsequent $---- assessment.
More than 30 days have passed since the issuance of the NOD and the taxpayer never petitioned the Tax
Court. You have asked whether the Service may now issue a corrected NOD or, alternatively, whether the
Service may ignore the erroneous statement in the NOD.

Appeals may amend or revise a NOD within the 30-day period in which a taxpayer may petition the Tax
Court if the NOD is clearly in error, the taxpayer has not petitioned Tax Court and the correction can be
made within the 30-day period in which the taxpayer may petition the Tax Court. IRM Part 8.22.9.15(1).
Moreover, the NOD may not be rescinded. Id. In this case, an amended or revised NOD is not an option,
because the 30-day period in which the taxpayer could have petitioned the Tax Court based on the
original NOD has expired. Moreover, despite the issuance of an erroneous NOD, Appeals may not abate
the initial $---- assessment, because it was not properly at issue in the CDP hearing. Indeed, abating the
$---- would not marginally benefit the taxpayer (above and beyond abating the $---- that is still on the books),
because it would not result in the issuance of a $---- credit or refund to the taxpayer. Section 6511(b)(2)
prohibits the Service from crediting or refunding to the taxpayer any payments made before the two-year
period immediately preceding the date on which the refund is allowed if no refund claim is filed. In this
case, the NOD would be considered the date on which the refund was allowed. It is our understanding that
the taxpayer has made no payments during the two-year period preceding the NOD. Moreover, while
Appeals is authorized to abate the subsequent $---- assessment, because it was made after the expiration
of the assessment statute of limitations (see section 6404(a)(2)), Appeals is not authorized to abate the
original $---- assessment. The original assessment was neither excessive in amount nor erroneously or
illegally assessed. See IRC section 6404(a)(1) and (3). Appeals may only implement a determination to the
extent authorized to do so. Accordingly, Appeals should send a letter to the taxpayer describing the error
and explaining that Appeals will in fact abate the $---- assessment (as agreed to in the CDP hearing), but,
despite the statement in the NOD, Appeals is prohibited from abating the original $---- assessment. This
does not change the determination in the NOD, which is that collection will not proceed. Because we have
concluded that in this case Appeals may clarify and correct the NOD with a letter, we do not need to
further consider whether Appeals may unilaterally ignore an erroneous misstatement in a NOD.

Feel free to cal me if you have any questions or further want to discuss.

Regards,