Restitution for a conspiracy to file false returns and generate fraudulent refunds is traceable to a Title 26 tax and must be assessed under section 6201(a)(4)

Plain-English summary

Under section 6201(a)(4), the IRS must assess court-ordered criminal restitution that is traceable to a Title 26 tax as if it were a tax. This short Chief Counsel email advises that the restitution here must be assessed. The indictment shows the defendant conspired to file false tax returns and generate fraudulent refunds the defendant was not entitled to, which (consistent with Q&A 2 of Chief Counsel Notice 2011-018) is traceable to a tax imposed by Title 26 and is assessable. That the judgment does not name the IRS as payee does not matter, because the government is the only victim, so the restitution is for the tax loss.

Ruling snapshot

• Question: Must the ordered restitution be assessed under section 6201(a)(4)?
• Outcome: Advice given (restitution is traceable to a Title 26 tax and is assessable)
• Key authorities: IRC § 6201(a)(4); Chief Counsel Notice 2011-018

Full text (IRS public release)

ID: CCA_2020070912254744
UILC: 6201.01-06

Number: 202141014
Release Date: 10/15/2021
From: ----------------------
Sent: Thursday, July 9, 2020 12:25:47 PM
To: -----------------------------------------------
Cc: ----------------
Bcc:
Subject: RE: Counsel needs to determine if assessable? - ---- - 3

The restitution ordered in this case must be assessed under IRC 6201(a)(4). The indictment shows that the defendant conspired with others to file false tax returns and generate fraudulent refunds to which the defendant was not entitled. Consistent with Q&A 2 of Chief Counsel Notice 2011-018, The Assessment and Collection of Criminal Restitution, this is ‘traceable to a tax imposed by Title 26’ and is assessable.

The fact that the judgment does not specifically provide that restitution is payable to the IRS does not affect whether or not the restitution is assessable. The government is the only victim in this case, so there is no question that the restitution is for the tax loss.

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