CCA 1349014: First assessment extension controls the refund look-back period

Plain-English summary

This Chief Counsel Advice addresses the refund look-back period when a taxpayer and the IRS sign multiple agreements extending the assessment period. It concludes that the first extension agreement, rather than the last one, supplies the date used to determine the additional refund limitation under section 6511(c)(2). The taxpayer may generally file a refund claim within six months after the agreed assessment period expires, but the refundable amount includes payments made after the first agreement and amounts that would have been available under section 6511(b)(2) if the claim had been filed when that first agreement was executed. The advice explains that using the last agreement could disadvantage taxpayers who signed more than one extension.

Ruling snapshot

• Question: Which assessment-extension agreement controls the refund look-back period under IRC § 6511(c)(2) when multiple Forms 872 are executed?
• Outcome: advice given
• Key authorities: IRC §§ 6501(c)(4), 6511(b)(2), and 6511(c)(2)

Full text (IRS public release)

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Office of Chief Counsel
Internal Revenue Service
memorandum
Number: 201349014
Release Date: 12/6/2013
CC:PA:01:LRPounders Third Party Communication: None
POSTS-138852-13 Date of Communication: Not Applicable

UILC: 6511.01-00, 6511.03-06

date: September 20, 2013

 to:   Senior Attorney (Atlanta)
       (Large Business & International)

from: Branch Chief, Branch 1
(Procedure & Administration)

subject: Applying the “Look-Back Period” under Section 6511(c)(2) to Refund Claims when
there are Multiple Section 6501(c)(4) Extensions by Agreement

       This Chief Counsel Advice responds to your request for assistance in determining the
       applicable limits on refunds under section 6511(c)(2) when the taxpayer and the Service
       have extended the assessment statute using multiple Forms 872. 1 This advice may not
       be used or cited as precedent.

       ADVICE

       Section 6511 covers the period of limitations on credits or refunds. Generally, a
       taxpayer has 3 years from the time he filed a tax return or 2 years from when he paid
       the tax, whichever is later, to file a refund claim. When the taxpayer and the Secretary
       agree to extend the time for assessment under the provisions of § 6501(c)(4), the
       taxpayer’s time to file a refund claim is essentially extended to 6 months after the
       agreed-upon assessment statute expires. In these circumstances, the amount of tax
       that can be refunded to the taxpayer is limited to:

              payments made between the time the agreement was executed and the filing of
               the refund claim, and


       1
         For example, when a Form 872 is executed extending the time to assess to a certain date, and then,
       before that date expires, the taxpayer signs another Form 872, further extending the time to assess to a
       later date.

POSTS-138852-13 2

 payments that would have been available under § 6511(b)(2) had the claim been
filed on the date the first agreement to extend the time to assess the tax was
executed. See Estate of Wheeler v. Commissioner, T.C. Memo. 1979-321.

Interpreting “agreement” as the last extension agreement would punish the taxpayer for
having agreed to additional extensions in that the amount of his refund may be limited
by section 6511(c)(2). Furthermore, using the last agreement could easily result in
disparate treatment. For example, if two unrelated taxpayers both agreed to extend the
assessment period on their 2009 tax year to 2015, and one accomplished this by
executing one Form 872 and the other by executing two, the latter taxpayer, by dint of
having executed two agreements rather than one, would have a different look-back
period than would have been available had he executed only one Form 872.

CASE DEVELOPMENT, HAZARDS AND OTHER CONSIDERATIONS

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.

Please call Larry Pounders at ----------------------if you have any further questions.
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