A refund claim cannot be reconsidered after the suit period expires

Plain-English summary

Chief Counsel advice concluded that the IRS could not issue a refund after it had disallowed a claim as untimely and the period for filing a refund suit had expired. The advice relied on section 6514(a)(2), which treats such a refund as erroneous, and noted that later reconsideration by Appeals or Examination does not extend the suit period under section 6532(a)(4). The advice also noted that the taxpayer had not filed suit and had not obtained an extension of the two-year period.

Ruling snapshot

• Question: Can the IRS refund a disallowed claim after the statutory period for filing suit has expired?
• Outcome: Advice given
• Key authorities: IRC §§ 6511, 6514, and 6532

Full text (IRS public release)

ID: CCA_2012101608115640 Number: 201302030
Release Date: 1/11/2013
Office: -------------
UILC: 6514.00-00

From: ----------------------
Sent: Tuesday, October 16, 2012 8:12:10 AM
To: --------------------
Cc:
Subject: RE: Issue Coordination section 6511

Hi ---------

Thanks for sending the notice of disallowance. After looking at it and the other facts, we
conclude that IRC 6514(a)(2) would prevent the Service from making any refund based
on the ----------------------claim. Section 6514(a)(2) provides that a refund of any portion
of an internal revenue tax shall be considered erroneous if it is made after the Service
has disallowed the claim, and the period of limitation for filing suit has expired, unless
within such period a suit was begun by the taxpayer. As you noted, the Service formally
disallowed the taxpayer's ----------------------claim as untimely on ------------------. You
have confirmed that the Service did not agree to extend the 2-year period under IRC
6532(a)(2). The taxpayer therefore had until ------------------under IRC 6532(a)(1) to file a
refund suit, but they have not done so. While both Appeals and Exam now think the
original claim was timely, this does not matter because any consideration,
reconsideration, or action by the Secretary with respect to a claim following the mailing
of a notice of disallowance by certified mail shall not operate to extend the period within
which suit may be begun. IRC 6532(a)(4).

If you have any additional questions about this, please let me know.

Thanks,

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