An incorrect return may still start the assessment period

Plain-English summary

Chief Counsel Advice discusses whether an incorrect return can still be treated as a valid return for statute-of-limitations purposes. The advice states that the Germantown Trust rule was not decided in the TEFRA context, although part of the rule was codified in IRC § 6501(g). It further states that the rule may apply outside the TEFRA context when an incorrect return contains enough information to compute a tax.

Ruling snapshot

• Question: Can an incorrect return be valid for statute-of-limitations purposes if it contains sufficient information to compute tax?
• Outcome: Advice given.
• Key authorities: IRC § 6501(g); Germantown Trust rule.

Full text (IRS public release)

ID: CCA_2013032116281301 Number: 201319030
Release Date: 5/10/2013
UILC: 6501.00-00

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Sent: Thursday, March 21, 2013 4:28:13 PM
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Subject: RE: LLC S Corp - Returns Not Processed - TEFRA Implications?

Germantown Trust is a general rule that was not decided in the TEFRA context. It has been partly codified in section 6501(g) but arguably applies even outside that context. So if an incorrect return nevertheless has sufficient information to compute a tax, we should be treating it as valid for statute of limitations purposes.