Ezel / IRS Rulings / 201818016

Third-party victims had priority over IRS restitution collection

Number
201818016
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Assessment of Criminal Restitution
Topics
Procedure, penalties, and administration
Code sections
§ 6201
Ruling dated
April 17, 2018
Publicly released
May 4, 2018
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2018, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2018
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel considered two criminal cases with separate docket numbers but linked judgment and restitution orders. After consulting with the Tax Division, Counsel recommended treating them as one consolidated case. Under 18 U.S.C. § 3664(i), the IRS should not collect its tax restitution claim until the third-party, non-federal victims had been fully paid. Counsel therefore advised the IRS not to pursue collection from the taxpayer at that time.

Ruling snapshot

  • Question: Could the IRS collect tax restitution before the linked case's non-federal victims were fully compensated?
  • Outcome: Advice given: no, the IRS should wait.
  • Key authorities: IRC § 6201(a)(4); 18 U.S.C. § 3664(i); IRM 5.1.5.18.3.

Full text (IRS public release)

ID: CCA_2018041713174320
UILC: 6201.01-06

Number: 201818016
Release Date: 5/4/2018
From:
Sent: Tuesday, April 17, 2018 1:17:44 PM
To:
Cc:
Bcc:
Subject: FW: Counsel Opinion-RBA Collection -- POSTN-112136-18

Good morning,

We took a look at this case and both Judgment and Commitment Orders and although the cases have separate docket numbers, we would recommend treating them as a single consolidated case for the purposes of 18 USC 3664(i) and IRM 5.1.5.18.3. After consulting with Tax Division, we think that the judge considers the cases to be linked (see pp. ----------------------------- order, which mentions the term of incarceration and the restitution that was ordered in the tax case). Also, the tax case included a charge for ---
--------------------, and the restitution order for the non-government victims came from a ---
------------------------------------. Given the case linkage, we think the safe course of action is to assume that 18 USC 3664(i) (and IRM 5.1.5.18.3 which was modeled from 18 USC 3664(i)) prevents the IRS from recovering until the third-party, non-federal victims have been fully compensated. Therefore, we do not think the IRS should pursue collection from the taxpayer at this time. Please let us know if you have any questions and would like to discuss.

Thanks,
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