Internal Revenue Bulletin: 2011-28
July 11, 2011
Table of Contents
- FOR FURTHER INFORMATION CONTACT:
- SUPPLEMENTARY INFORMATION:
- Explanation of Provisions
- I. The Proper Place to File a Claim for Credit or Refund
- II. The Proper Form for Filing a Claim for Credit or Refund
- III. Claims for Employment Taxes
- IV. Internal Revenue Districts
- V. Outdated Provisions
- VI. Section 6405
- Proposed Effective Date
- Special Analyses
- Comments and Requests for a Public Hearing
- Proposed Amendments to the Regulations
- Drafting Information
This document contains proposed regulations for filing a claim for credit or refund. The regulations provide guidance to taxpayers generally as to the proper place to file a claim for credit or refund. The regulations are updated to reflect changes made by the enactment of the Tax Reform Act of 1976, the Internal Revenue Service Restructuring and Reform Act of 1998, and the Community Renewal Tax Relief Act of 2000. The regulations further are updated to reflect that the IRS may prescribe additional claim forms.
Written or electronic comments and requests for a public hearing must be received by September 8, 2011.
Send submissions to: CC:PA:LPD:PR (REG-137128-08), room 5205, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-137128-08), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, N.W., Washington, DC, or sent electronically via the Federal eRulemaking Portal at www.regulations.gov (IRS REG-137128-08).
Concerning submission of comments or request for a hearing, Richard.A.Hurst@irscounsel.treas.gov, (202) 622-7180 (not a toll-free number); concerning the proposed regulations, Micah A. Levy, (202) 622-3630 (not a toll-free number).
This document contains proposed amendments to 26 CFR part 301 under section 6402 of the Internal Revenue Code (Code). Section 6402 of the Code authorizes the Secretary to make credits or refunds. Section 6511 provides the limitations period within which a taxpayer must file a claim for credit or refund and restricts the ability of the Secretary to issue a credit or refund unless the claim is filed by the taxpayer within that period. Section 7422 prohibits the maintenance of a suit for refund until a claim has been duly filed with the Secretary. Currently, §301.6402-2(a)(2) provides generally that a claim for credit or refund needs to be filed with the service center serving the internal revenue district in which the tax was paid. The proposed regulations clarify that, unless otherwise directed, the proper place to file a claim for credit or refund is with the service center at which the taxpayer currently would be required to file a tax return for the type of tax to which the claim relates, irrespective of where the tax was paid or was required to have been paid.
This document also removes outdated portions of §§301.6402-2 and 301.6402-3 and revises the reference in §301.6402-4 to the Joint Committee on Taxation threshold referral amount under section 6405.
If a taxpayer is required to file a claim for credit or refund on a particular form, then the claim must be filed in a manner consistent with that form and the related instructions. For example, to correct an amount reported on a Form 1040, “U.S. Individual Income Tax Return,” Treasury regulation §301.6402-3(a)(2) requires that the taxpayer file the claim on a Form 1040X, “Amended U.S. Individual Income Tax Return.” Accordingly, a claim for refund of an overpayment of individual income taxes would need to be filed on a Form 1040X at the location specified in the instructions provided for the form. If filing instructions are not otherwise provided, a claim for credit or refund must be filed with the service center at which the taxpayer would be required to file a current tax return for the type of tax to which the claim relates. Section 301.6402-2(a)(2) is revised to clarify that claims should not be filed at a different location based upon where the tax either was paid or was required to have been paid. Nor would it be relevant if the tax was properly paid at a different location in a prior year because the taxpayer had a change in residence.
The IRS has prescribed various forms that must be used to file a claim for credit or refund for a particular tax. For example, as explained in this preamble, an individual taxpayer must use a Form 1040X to file a claim for refund of income tax. The proposed regulations would revise §301.6402-2(c) to provide that taxpayers must use the form prescribed for filing a particular claim for credit or refund. When there is no alternative form prescribed, a claim for credit or refund is to be filed on a Form 843, “Claim for Refund and Request for Abatement.”
On July 1, 2008, final regulations (T.D. 9405, 2008-32 I.R.B. 293) relating to employment tax adjustments and employment tax refund claims were published in the Federal Register (73 FR 37371). Those final regulations modify the process for making claims for refund of overpayments of employment taxes under section 6402. To file a claim to correct errors discovered on or after January 1, 2009, an employer now uses the form that corresponds to the return being corrected. The new forms correspond with Form 941, “Employer’s QUARTERLY Federal Tax Return”; Form 943, “Employer’s Annual Federal Tax Return for Agricultural Employees”; Form 944, “Employer’s ANNUAL Federal Tax Return”; Form 945, “Annual Return of Withheld Federal Income Tax”; and Form CT-1, “Employer’s Annual Railroad Retirement Tax Return.” For example, Form 941-X, “Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund,” is used by employers instead of Form 843, “Claim for Refund and Request for Abatement.” The new “X” forms are used to claim refunds, make adjustments, and request abatements of employment taxes. In addition, §301.6402-2(d) is revised to provide that when filing a claim for employment taxes, a separate claim must be made for each taxable period. For example, if an employer overpaid social security taxes on Forms 941 filed for the third and fourth quarters in 2009, then the employer must file a separate Form 941-X for each quarter.
The proposed regulations make technical revisions that remove the reference to “internal revenue districts” in §301.6402-2(a)(2), because such reference has been made obsolete by the enactment of the Internal Revenue Service Restructuring and Reform Act of 1998, Public Law 105-206, 112 Stat. 685. The technical revisions also remove the references to a district director or director of the regional service center in §§301.6402-3 and 301.6402-4, as those positions no longer exist within the IRS.
Treasury Decision 6950, 1968-1 C.B. 528 (33 FR 5354) (Aug. 4, 1968), revised paragraph (a)(2) of §301.6402-2 to distinguish between claims filed before and claims filed on or after April 15, 1968. Those revisions provided that claims filed before April 15, 1968 must be filed in the office of the internal revenue officer to whom the tax was paid. For claims filed on or after April 15, 1968, claims were directed to be filed with the service center serving the internal revenue district in which the tax was paid.
Treasury Decision 7410, 1976-1 C.B. 384 (41 FR 11019) (Mar. 16, 1976), revised paragraph (c) of §301.6402-2 to distinguish between claims filed before and claims filed on or after July 1, 1976. Those revisions provided that, except for claims for the refund of overpayments of income taxes filed on or after July 1, 1976, all refund claims for taxes, interest, penalties, and additions to tax needed to be filed on Form 843, “Claim for Refund and Request for Abatement.” Treasury Decision 7410 also revised paragraphs (a) and (b) of §301.6402-3 to prescribe different form requirements for claims for the refund of overpayments of income taxes depending on whether the claim was filed before July 1, 1976, or would be filed on or after July 1, 1976.
The regulations are revised to remove the outdated guidance regarding the varying requirements based on these dates.
Section 6405 requires the advance referral of a report to the Joint Committee on Taxation regarding specified types of refunds or credits in excess of a threshold amount (currently $2,000,000). Section 1907(a)(1) of the Tax Reform Act of 1976, Public Law 94-455, 90 Stat. 1520, 1835, amended section 6405 to reference the “Joint Committee on Taxation,” instead of the “Joint Committee on Internal Revenue Taxation.” The proposed regulations would update the reference to the “Joint Committee on Internal Revenue Taxation” in §301.6402-4 with a reference to the “Joint Committee on Taxation.” Section 305(a) of the Community Renewal Tax Relief Act of 2000, Public Law 106-554, 114 Stat. 2763, 2763A-634, section 11834(a) of the Omnibus Budget Reconciliation Act of 1990, Public Law 101-508, 104 Stat. 1388, 1388-560, and section 1210(a) of the Tax Reform Act of 1976, 90 Stat. 1520, 1522, revised the threshold referral amount in section 6405 by replacing $100,000 with $2,000,000. To avoid the need to revise this regulation again to reflect any future change in the threshold amount, the parenthetical reference to the specific amount required for the section 6405 threshold referral is removed.
These rules, when they are promulgated as final regulations, will apply to claims for credit or refund filed on or after the date that the final regulations are published in the Federal Register. The rules in these proposed regulations may be relied upon by taxpayers making claims for credit or refund before publication of the Treasury decision.
It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply to the regulations, and, therefore, a regulatory flexibility analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, this regulation has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comments on its impact on small businesses.
Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and 8 copies) or electronic comments that are submitted timely to the IRS. The IRS and the Treasury Department request comments on the clarity of the proposed rules and how they can be made easier to understand. All comments will be available for public inspection and copying. A public hearing will be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the public hearing will be published in the Federal Register.
Accordingly, 26 CFR part 301 is proposed to be amended as follows:
Paragraph 1. The authority citation for part 301 continues to read as follows:
Authority: 26 U.S.C. 7805 ***
Par. 2. Section 301.6402-2 is amended by revising paragraphs (a)(2), (b)(2), (c), and (d) and adding paragraph (g) to read as follows:
(a) * * *
(2) Except as provided in paragraph (b) of §301.6091-1 (relating to hand-carried documents), the claim, together with appropriate supporting evidence, generally must be filed with the service center at which the taxpayer currently would be required to file a tax return for the type of tax to which the claim relates. Notwithstanding the preceding sentence, if a taxpayer is required to file a claim for credit or refund on a particular form, then the claim must be filed in a manner consistent with such form and form instructions. If a taxpayer is filing a claim in response to an IRS notice or correspondence, then the claim must be filed in accordance with the specific instructions contained in the notice or correspondence regarding the proper address for filing. As to interest in the case of credits or refunds, see section 6611. See section 7502 for provisions treating timely mailing as timely filing, and section 7503 for the time for filing a claim when the last day falls on Saturday, Sunday, or a legal holiday.
(b) * * *
(2) The IRS does not have the authority to refund on equitable grounds penalties or other amounts legally collected.
(c) Form for filing claim. Unless the IRS otherwise has prescribed a particular form on which the claim must be filed, in which case the claim shall be made on such other form, all claims by taxpayers for the refunding of taxes, interest, penalties, and additions to tax shall be made on Form 843, “Claim for Refund and Request for Abatement.” For special rules applicable to income taxes, see §301.6402-3. For provisions relating to credits and refunds of taxes other than income tax, see the regulations relating to the particular tax.
(d) Separate claims for separate taxable periods. In the case of income and gift taxes, income tax withheld, taxes under the Federal Insurance Contributions Act, taxes under the Railroad Retirement Tax Act, and taxes under the Federal Unemployment Tax Act, a separate claim shall be made for each return for each taxable period.
* * * * *
(g) Effective/Applicability date. This section is applicable on the date that the final regulations are published in the Federal Register.
Par. 3. Section 301.6402-3 is amended by revising paragraph (a), introductory text, removing paragraph (b), redesignating paragraphs (c), (d), (e) and (f), as (b), (c), (d) and (e), respectively, and revising paragraphs (b) and (e) to read as follows:
(a) In the case of a claim for credit or refund of income tax—
* * * * *
(b) The filing of a properly executed income tax return shall, in any case in which the taxpayer is not required to show the tax on the form (see section 6014 and the regulations), be treated as a claim for refund and such return shall constitute a claim for refund within the meaning of section 6402 and section 6511 for the amount of the overpayment shown by the computation of the tax made by the Secretary on the basis of the return. Whether such claim is timely filed within the limitations period prescribed by section 6511 will be governed by the date on which the return is considered filed, except that if the requirements of §301.7502-1 (relating to timely mailing treated as timely filing) are met, the claim shall be considered to have been filed on the date of the postmark stamped on the cover in which the return was mailed.
* * * * *
(e) Effective/Applicability date. This section is applicable on the date that the final regulations are published in the Federal Register, except that references in paragraph (d) of this section to Form 8805 or other statements required under §1.1446-3(d)(2) shall apply to partnership taxable years beginning after April 29, 2008.
Par. 4. Section 301.6402-4 is revised to read as follows:
In certain cases, a taxpayer’s payments in respect of a tax liability, made before the filing of the return, may exceed the amount of tax shown on the return. For example, such payments may arise in the case of income tax if the estimated tax payments or the credit for income tax withheld at the source on wages exceeds the amount of tax shown on the return, or if the installment payments based on a corporation’s estimate of its tax liability on an application for an extension of time to file its return exceeds the tax liability shown on the return subsequently filed. In any case in which the Secretary determines that the payments by the taxpayer (made within the period prescribed for payment and before the filing of the return) are in excess of the amount of tax shown on the return, the Secretary may make credit or refund of such overpayment without awaiting examination of the completed return and without awaiting filing of a claim for refund. The provisions of §§301.6402-2 and 301.6402-3 are applicable to such overpayment, and taxpayers should submit claims for refund (if the income tax return is not itself a claim for refund, as provided in §301.6402-3) to protect themselves in the event the Secretary fails to make such determination and credit or refund. The provisions of section 6405 (relating to reports of refunds in excess of the statutorily prescribed threshold referral amount to the Joint Committee on Taxation) are not applicable to the overpayments described in this section caused by timely payments of tax which exceed the amount of tax shown on a timely filed return.
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on June 9, 2011, 8:45 p.m., and published in the issue of the Federal Register for June 10, 2011, 76 F.R. 34017)
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