CCA 201312047: Form 870-AD agreement did not bar assessment of a carryback adjustment

Plain-English summary

Chief Counsel advised that a Form 870-AD agreement signed by taxpayers and the IRS was not a binding agreement that conclusively settled the taxpayers' liability. The advice concerned a proposed assessment of a carryback adjustment. It relied on the Eighth Circuit's decision in Ihnen v. United States, which held that Form 870-AD agreements are not binding in that way. The advice therefore concluded that the agreement would not prevent the IRS from making the assessment.

Ruling snapshot

• Question: Would a Form 870-AD agreement prevent assessment of a carryback adjustment under IRC § 6213(d)?
• Outcome: Advice given, the agreement would not preclude assessment.
• Key authorities: IRC § 6213(d); Ihnen v. United States, 272 F.3d 577 (8th Cir. 2001)

Full text (IRS public release)

ID: CCA_2013022816161503 Number: 201312047
Release Date: 3/22/2013
Office: -----------------------------
UILC: 6213.08-00

From: --------------------
Sent: Thursday, February 28, 2013 4:16:18 PM
To: ----------------
Cc: ----------------------
Subject: RE: IRC 6213(d) Issue

The Eighth Circuit has held that Form 870-AD agreements are not binding agreements
and do not conclusively settle a tax liability. See Ihnen v. United States, 272 F.3d 577,
579 (8th Cir. 2001). Accordingly, the Form 870-AD executed by the taxpayers and the
Service would not preclude assessment of the carryback adjustment here. I hope this is
helpful.
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