Refund claims after an unexecuted Form 872

Plain-English summary

The Chief Counsel advice considers whether a taxpayer's refund claim was timely after the taxpayer sent the IRS a Form 872 extending the assessment period. It concludes that the extension was not valid because the Service had not executed the form before the assessment period expired. The taxpayer therefore had to file the refund claim within the normal section 6511 limitations period. The advice finds no general equitable remedy based on the Service's delay in executing the extension.

Ruling snapshot

• Question: Does sending a Form 872 to the IRS extend the period for filing a refund claim before the Service executes it?
• Outcome: Advice given
• Key authorities: IRC §§ 6404(e), 6501(c)(4), 6511(c)(1); Treas. Reg. § 301.6501(c)-1(d)

Full text (IRS public release)

                                                                                             -

ID: CCA-103194-13 [Third Party Communication:

UILC: 6511.00-00 Date of Communication: Month DD, YYYY]

Number: 201402003
Release Date: 1/10/2014
From:
Sent: Thursday, October 31, 2013 9:45:01 AM
To:
Cc:
Bcc:
Subject: RE: ----------------------

This responds to your OVDI inquiry from September 26, 2013.

In this situation, the statute of limitations under section 6511 on issuing the refund has
expired. Under section 6511(c)(1), when there is an extension of the limitations period
on assessment due to a valid extension under section 6501(c)(4), the taxpayer has 6
months from the expiration of that extended assessment period under section
6501(c)(4) to claim a refund. Here, the Service received the taxpayer’s statutory
extension (Form 872) prior to the expiration of the assessment period for -------, but
failed to execute the Form 872 prior to the expiration of the --------assessment period.
After the ------- assessment period expired, the taxpayer filed a claim for refund for ------.

There is no authority that holds for the proposition that a Form 872 is effective once
received by the Service, or that an extension is otherwise effective prior to execution by
the Service. See Reg. 301.6501(c)-1(d). Case law indicates that the 872 must be
signed by both the taxpayer and the Service prior to the expiration of the statute of
limitations in order to be effective. See, e.g., King v. Commissioner, T.C. Memo. 2006-
112 (while Form 872 need not be dated, it must be signed by both the taxpayer and the
Service prior to the expiration of the limitations period under section 6501). As there is
no valid extension, the taxpayer had to file the claim for refund within the normal period
of limitations within section 6511 for it to be considered timely filed. (The taxpayer’s
period of limitations to file a claim for refund does not get extended by section
6511(c)(1) merely by submitting a Form 872 to the Service.) While this is unfortunate ,
the provisions of sections 6501(c)(4), reg. 301.6501(c)-1(d), and 6511 are explicit.

Our research has also found no CCA, SCA or FSA that holds for the proposition that
there is some sort of equitable remedy when the Service doesn’t act promptly.
This is not like the suspension of interest under section 6404(e), when there is a
ministerial act that does not occur timely. Even if you could draw the corollary, the
decision to execute a statute extension would never be considered “ministerial” for this
purpose.