CCA explains when overpayment interest begins for refund claims

Plain-English summary

Chief Counsel Advice addresses when overpayment interest begins on refund claims for two tax years. The advice concludes that interest is allowed from the date the taxpayer became overpaid, which was the statutory due date for the income tax returns on the facts described. It applies that rule to the two specified March 15 dates and finds no exception that would delay interest.

Ruling snapshot

• Question: When does overpayment interest begin for the taxpayer's refund claims for the two tax years?
• Outcome: Advice given, interest begins when the taxpayer became overpaid.
• Key authorities: IRC § 6611(b)(2).

Full text (IRS public release)

       Office of Chief Counsel
       Internal Revenue Service
       Memorandum
       Number: 201330032
       Release Date: 7/26/2013
       CC:PA:02:                                           Third Party Communication: None
       POSTF-140420-12                                     Date of Communication: Not Applicable

UILC: 6611.00-00

date: March 21, 2013

 to:   Attorney
       (CC:LB&I:F:MAN:1)
       Attn: ------------------------

from: Pamela W. Fuller
Senior Technician Reviewer
(Procedure & Administration)

subject: Overpayment Interest on Refund Claims

       This Chief Counsel Advice responds to your request for assistance. This advice may
       not be used or cited as precedent.

       LEGEND

       X                =       ----------------------------------------------------

       $a               =       ----------------

       $b               =       ----------------

       Year 1           =       -------

       Year 2           =       -------

       Year 3           =       -------

       ISSUES

       Whether overpayment interest is allowable on X’s refund claims for tax year Year 1 and
       tax year Year 2, and if so from what starting date.

POSTF-140420-12 2

       CONCLUSIONS

Overpayment interest is allowable from the date X became overpaid. X became
overpaid when X’s income tax payments exceeded X’s liabilities. For tax year Year 1
this date is March 15, Year 2; for tax year Year 2, this date is March 15, Year 3.

FACTS / BACKGROUND

X timely filed income tax returns for tax year Year 1 and tax year Year 2. On October
18, Year 3, X filed amended returns for both tax year Year 1 and tax year Year 2,
claiming refunds of income tax in the amounts of $a and $b for tax years Year 1 and
Year 2, respectively.

The income tax payments giving rise to X’s overpayments are deemed paid on the
statutory due dates of the Year 1 and Year 2 income tax returns, March 15, Year 2 and
March 15, Year 3, respectively.

LAW AND ANALYSIS

Section 6611(b)(2) provides, in general, that in the case a refund, the period for which
overpayment interest shall be allowed begins on the date of the overpayment giving rise
to the refund. X’s income tax payments for tax years Year 1 and Year 2 are deemed
paid as of the statutory due dates, March 15, Year 2, and March 15, Year 3,
respectively. These payments caused X to become overpaid as of those dates.
Because no exceptions to the general rule of section 6611(b)(2) apply, interest is
allowable on X’s overpayments from March 15, Year 2, and March 15, Year 3,
respectively.

This writing may contain privileged information. Any unauthorized disclosure of this
writing may undermine our ability to protect the privileged information. If disclosure is
determined to be necessary, please contact this office for our views.

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