Section 6503(a) rarely adds to the collection-statute suspension for a pending installment agreement

Plain-English summary

Chief Counsel considered when the collection statute expiration date could be suspended simultaneously under sections 6503(a) and 6331(k). Section 6503(a) concerns deficiencies and deficiency litigation, while the collection period generally does not begin until tax is assessed. For both suspensions to matter, the tax would need to be assessed before a notice of deficiency for the same tax, a situation Chief Counsel could envision mainly after a jeopardy assessment. Because taxpayers subject to jeopardy assessments would rarely be entering installment agreements, the overlap should be unusual. The advice concludes that section 6503(a) will almost never extend the collection suspension beyond the suspension already supplied by section 6331(k).

Ruling snapshot

• Question: When can sections 6503(a) and 6331(k) simultaneously suspend the collection statute expiration date?
• Outcome: Advice given: almost never, except in unusual circumstances such as a notice of deficiency following a jeopardy assessment.
• Key authorities: IRC §§ 6331(k) and 6503(a).

Full text (IRS public release)

ID: CCA_2018020609542847
UILC: 6331.00-00, 6503.00-00

Number: 201811013
Release Date: 3/16/2018
From:
Sent: Tuesday, February 06, 2018 9:54:28 AM
To:
Cc:
Bcc:
Subject: FW: Request for Opinion - Suspension of CSED during pending IA - POSTS-121877-17

You asked about the situation in which suspensions of the CSED under 6503(a) and 6331(k) could simultaneously apply. As discussed, this would be an unusual factual scenario.

Section 6503(a) applies to deficiencies and deficiency litigation. The collection statute does not begin to run until after the tax is assessed. In order for there to be a suspension of the CSED under 6503(a), there would have to be a situation in which the tax is assessed before a notice of deficiency was issued for the same tax. The only situation in which we can imagine this occurring is a jeopardy situation, where a notice of deficiency is issued following a jeopardy assessment. We don’t believe there would be many cases in which a taxpayer would be attempting to pay off a jeopardy assessment with an installment agreement (given that jeopardy assessments are generally made against noncompliant taxpayers who would not likely be cooperating with the IRS to enter into installment agreements). We believe the district court case you cited interprets section 6503(a) overbroadly, and you can generally assume that section 6503(a) will almost never suspend the CSED beyond the suspension already provided in section 6331(k).

Please feel free to contact me if you have any further questions. Thanks.