Refund extension could not be signed after the suit deadline

Plain-English summary

The IRS issued a claim-disallowance notice that started the two-year period for filing a refund suit. Although Section 6532(a)(2) permits the parties to extend that period using Form 907, the extension had to be executed before the original two-year period expired. Once the deadline passed without a timely suit or extension, Section 6514(a)(2) prohibited the IRS from issuing the refund. The IRS therefore advised that no relief was available.

Ruling snapshot

• Question: Could the taxpayer obtain a refund or execute a Form 907 extension after the refund-suit period had expired?
• Outcome: Advice given: no relief was available.
• Key authorities: IRC §§ 6514(a)(2) and 6532(a)(2)

Full text (IRS public release)

ID: CCA_2020031318393440
UILC: 6532.02-04, 6514.00-00

Number: 202125015
Release Date: 6/25/2021
From:
Sent: Friday, March 13, 2020 6:39:34 PM
To:
Cc:
Bcc:
Subject: SBSE Counsel advice in #6500871

Hi ------. Thanks for your patience. I’ve now taken a closer look at this and agree with the SBSE
Counsel opinion. In addition, here are a few other key points:

1) The 105C was issued on April 12, 2017. That means the two-year period for filing suit expired on
April 12, 2019. Yes, under IRC § 6532(a)(2) the two-year period can be extended by using Form
907, but the time for executing such extension has expired; the extension would have had to
have been executed before the two-year period had expired. Take a look at this AOD and the
case for which it was issued. https://www.irs.gov/pub/irs-aod/aod200404.pdf

2) Once the IRS issues a notice of claim disallowance, the IRS is prohibited from issuing a refund
after the 2-year period for filing suit has expired unless the taxpayer has protected herself by
filing a timely refund suit. See IRC § 6514(a)(2).

Unfortunately I do not see any relief that can be given for this taxpayer’s ------- refund.
Let me know if you have any further questions.

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