80 FR 43949 - Claims for Credit or Refund

DEPARTMENT OF THE TREASURY
Internal Revenue Service

Federal Register Volume 80, Issue 142 (July 24, 2015)

This document contains final 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 Tax Reform Act of 1976, section 1210, the Internal Revenue Service Restructuring and Reform Act of 1998, and the Community Renewal Tax Relief Act of 2000. The regulations are further updated to reflect that the IRS may prescribe additional claim forms.

[Federal Register Volume 80, Number 142 (Friday, July 24, 2015)]
[Rules and Regulations]
[Pages 43949-43952]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-18119]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[TD 9727]
RIN 1545-BI36


Claims for Credit or Refund

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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SUMMARY: This document contains final 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 Tax Reform 
Act of 1976, section 1210, the Internal Revenue Service Restructuring 
and Reform Act of 1998, and the Community Renewal Tax Relief Act of 
2000. The regulations are further updated to reflect that the IRS may 
prescribe additional claim forms.

DATES: 
    Effective Date: These regulations are effective on July 24, 2015.
    Applicability Dates: For dates of applicability, see Sec. Sec.  
301.6402-2(g), 301.6402-3(f) and 301.6402-4(b).

FOR FURTHER INFORMATION CONTACT: Micah A. Levy, (202) 317-6832 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    These final regulations amend current regulations under section 
6402 of the Internal Revenue Code (Code). Section 6402 of the Code 
authorizes the Secretary to make credits or refunds of overpayments. 
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, Sec.  301.6402-2(a)(2) provides generally that a claim for 
credit or refund must be filed with the service center serving the 
internal revenue district in which the tax was paid. These final 
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.
    These final regulations remove outdated portions of Sec.  301.6402-
2 that provided rules for claims filed prior to April 15, 1968 and 
Sec.  301.6402-3 that provided special rules for claims for credit or 
refund of income taxes filed before July 1, 1976, and revises the 
reference in Sec.  301.6402-4 to reflect the threshold for referral to 
the Joint Committee on Taxation pursuant to section 6405. These final 
regulations do not affect Sec.  301.6402-3T as promulgated in Treasury 
Decision 9658 (79 FR 12880) (March 6, 2014). Other stylistic revisions 
were adopted solely to conform the regulations to modern drafting style 
and usage.
    On June 10, 2011, the IRS published a notice of proposed rulemaking 
(REG-137128-08) in the Federal Register (76 FR 34017). No request for a 
public hearing was received. The IRS received written and electronic 
comments responding to the notice of proposed

[[Page 43950]]

rulemaking. After consideration of the comments, the proposed 
regulations are adopted as amended by this Treasury decision. All 
comments are available at www.regulations.gov or upon request.

Explanation of Provisions and Summary of Comments

I. Electronic Filing

    Commentators suggested that the regulations should provide for 
electronic filing, when available. Although the final regulations do 
not explicitly refer to electronic filing, the final regulations 
instruct taxpayers to file a claim for credit or refund in a manner 
consistent with forms, form instructions, publications, and other 
guidance on the IRS Web site. To the extent that electronic filing is 
or becomes available for filing a claim for credit or refund, it will 
be described elsewhere--for example, in forms, form instructions, 
publications, or the IRS Web site.

2. Claims Unrelated to a Tax for Which a Return Is Required

    Commentators noted that some penalties are not related to any tax 
for which a return is required. These commentators observed that the 
instructions to Form 843, ``Claim for Refund and Request for 
Abatement,'' that taxpayers use to file a claim for credit or refund of 
penalties that are unrelated to any tax for which a return is required 
are unhelpful because they instruct taxpayers to file Form 843 with the 
service center in which the taxpayer would be required to file a 
current tax return for ``the tax to which your claim or request 
relates.'' For an assessable penalty that is unrelated to a particular 
tax, the notice containing or issued along with demand for payment 
would provide the proper address for filing a claim for credit or 
refund and the taxpayer should file a claim in accordance with any 
specific instructions contained therein.
    The locations at which the IRS processes the various forms for any 
given subset of taxpayers may change and the proper place to identify 
such locations is in the various forms, instructions, publications, and 
the IRS.gov Web site. These regulations appropriately cross-reference 
such authorities.

3. Protective and Informal Claims

    Commentators suggested that the regulations be amended to discuss 
protective claims and informal claims. Although not provided for in the 
Code, case law provides that protective claims may be filed to preserve 
a taxpayer's right to claim a refund when the taxpayer's right to the 
refund is contingent on future events and may not be determinable until 
after the statute of limitations expires. Case law also provides that a 
claim for refund that is technically deficient with respect to some 
formal claim requirement (that is, an ``informal'' claim) might 
nonetheless be a valid claim as long as it meets certain basic 
requirements (for example, even an informal claim must contain a 
written component). While the IRS has recognized both protective and 
informal claims in some circumstances, neither is within the scope of 
these regulations.

4. Authority To Make Refunds on Equitable Grounds

    Commentators suggested that Treas. Reg. sec. 301.6402-2(b)(2), 
which explains that the IRS lacks the authority to make a refund on 
equitable grounds, should include exceptions for sections 6015(f) and 
6343(d). Those and other Code provisions allow the IRS to consider 
equitable factors in making certain determinations, such as whether a 
taxpayer is eligible for innocent spouse relief or whether a levy may 
be released. The equitable factors that the IRS may consider in these 
statutorily prescribed situations affect only whether the taxpayer has 
an overpayment or otherwise may be entitled to particular relief. Once 
an overpayment is determined, whether by taking equitable 
considerations into account or not, such overpayment may be refunded 
only if the taxpayer or IRS follows all of the statutory and 
administrative prerequisites required to allow and make a refund. See 
United States v. Clinton Elkhorn Mining Co., 553 U.S. 1 (2008). None of 
those equitable factors otherwise determine whether or how the IRS is 
to issue a refund. Section 6402, in turn, prescribes the treatment of 
overpayments and provides the regime under which the IRS may issue a 
refund. In other words, although equitable considerations may be taken 
into account under some Code sections in determining either the 
existence or amount of an overpayment, those sections do not provide 
any authority (equitable or statutory) to allow or make credits and 
refunds under section 6402. The statutory language of section 6402(a) 
provides that, if there is an overpayment, then the IRS shall refund 
that overpayment (subject to certain exceptions enumerated in the 
statute).
    The IRS has discretion to grant equitable relief from joint and 
several liability under section 6015(f) to a requesting spouse if, 
considering all of the facts and circumstances, it would be inequitable 
to hold the requesting spouse jointly and severally liable. In those 
cases in which the IRS does apply equitable factors to determine 
whether a taxpayer is in an overpayment situation, such as under 
section 6015(f), the IRS considers things such as (1) whether the 
taxpayer is divorced, (2) whether the tax liability is due to income of 
the non-requesting spouse, and (3) the health of the requesting spouse. 
See, Rev. Proc. 2013-34, 2013-43 IRB 397 (Sept. 16, 2013). When a 
requesting spouse is relieved of joint and several liability, relief 
will rarely result in an overpayment because equitable relief under 
section 6015(f) generally involves unpaid liabilities. As a result, in 
many cases in which the IRS determines that a requesting spouse is 
entitled to equitable relief, the IRS ceases collection activity 
against the requesting spouse for any due, but unpaid, tax liabilities. 
Nonetheless, when equitable relief does result in an overpayment, the 
requesting spouse may receive a refund by filing a claim for refund 
using a Form 8857, Request for Innocent Spouse Relief, that complies 
with section 6402. Thus, the equitable considerations in section 
6015(f) relate to whether the requesting spouse is entitled to relief, 
not whether a resulting overpayment is refunded.
    Section 6343(d) provides for the return of levied property to a 
taxpayer in certain circumstances, including when, ``with the consent 
of the taxpayer or the National Taxpayer Advocate, the return of such 
property would be in the best interests of the taxpayer (as determined 
by the National Taxpayer Advocate) and the United States.'' Although 
section 6343(d) may allow the IRS to consider equitable factors in 
determining whether to return the property, the return of levied 
property does not affect the amount of a taxpayer's tax liability and 
will not result in an overpayment. Accordingly, if the IRS returns 
property under section 6343(d) and the taxpayer fails to pay the 
previously assessed liability for which the levy was made on the 
returned property, then the IRS may collect the liability again, 
administratively or otherwise.
    The refund provisions of section 6402 are only triggered once an 
overpayment exists and is established. Indeed, the section begins 
``[i]n the case of any overpayment. . . .'' By presupposing the 
existence of an overpayment, the equitable factors that the IRS may 
have considered are not implicated or relevant in the determination of 
whether the overpayment is credited or refunded. Moreover, once the 
equitable factors have been used to establish the

[[Page 43951]]

taxpayer's ability to claim a refund, the amount of any overpayment is 
a purely mathematical calculation--no equitable factors exist at this 
stage. The final regulations continue to make clear that the IRS lacks 
the authority to refund on equitable grounds penalties or other amounts 
legally collected that comprise an overpayment.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 12866, as 
supplemented by Executive Order 13563. 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, the 
notice of proposed rulemaking preceding these regulations were 
submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comments on its impact on small business, and no 
comments were received.

Drafting Information

    The principal author of the regulations is Micah A. Levy, Office of 
the Associate Chief Counsel (Procedure & Administration). Mr. Levy can 
be reached at (202) 317-6832 (not a toll-free number).

List of Subjects in 26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR part 301 is amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

0
Paragraph 1. The authority citation for part 301 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *


0
Par. 2. Section 301.6402-2 is amended by:
0
1. Revising paragraphs (a)(2), (b)(2), (c), and (d).
0
2. Adding paragraph (g).
    The revisions and addition read as follows:


Sec.  301.6402-2  Claims for credit or refund.

    (a) * * *
    (2) Except as provided in paragraph (b) of Sec.  301.6091-1 
(relating to hand-carried documents), if a taxpayer is required to file 
a claim for credit or refund using a particular form, then the claim, 
together with appropriate supporting evidence, shall be filed in a 
manner consistent with such form, form instructions, publications, or 
other guidance found on the IRS.gov Web site. 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 manner of filing. Any other 
claim not described in the preceding sentences 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 or via the appropriate electronic portal. For rules relating to 
interest in the case of credits or refunds, see section 6611. For rules 
treating timely mailing as timely filing, see section 7502. For rules 
relating to the time for filing a claim when the last day falls on 
Saturday, Sunday, or a legal holiday, see section 7503.
    (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. If a particular form is prescribed on 
which the claim must be made, then the claim must be made on the form 
so prescribed. For special rules applicable to refunds of income taxes, 
see Sec.  301.6402-3. For provisions relating to credits and refunds of 
taxes other than income tax, see the regulations relating to the 
particular tax. All claims by taxpayers for the refund of taxes, 
interest, penalties, and additions to tax that are not otherwise 
provided for must be made on Form 843, ``Claim for Refund and Request 
for Abatement.''
    (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 
must be made for each return for each taxable period.
* * * * *
    (g) Effective/applicability date. Paragraphs (a)(2), (b)(2), (c), 
and (d) of this section apply to claims for credit or refund filed on 
or after July 24, 2015. Paragraphs (a)(1), (b)(1), (e), and (f) of this 
section apply to claims for credit or refund filed before, on or after 
July 24, 2015.

0
Par. 3. Section 301.6402-3 is amended by:
0
1. Revising the introductory text of paragraph (a).
0
2. Removing and reserving paragraph (b).
0
3. Revising paragraphs (c) and (f).
    The revisions read as follows:


Sec.  301.6402-3  Special rules applicable to income tax.

    (a) The following rules apply to a claim for credit or refund of 
income tax:--
* * * * *
    (b) [Reserved]
    (c) If the taxpayer is not required to show the tax on the form 
(see section 6014 and the accompanying regulations), the IRS will treat 
a properly filed income tax return as a claim for refund and such 
return will 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 IRS on the basis of the return. For 
purposes of the limitations period of section 6511, such claim will be 
treated as filed on the date the return is treated as filed.
* * * * *
    (f) Effective/applicability date. (1) Paragraph (c) of this 
section, as revised, applies to claims for credit or refund filed on or 
after July 24, 2015. Paragraphs (a), (d), and (e) of this section apply 
to claims for credit or refund filed before, on or after July 24, 2015, 
except references in paragraph (e) to Form 8805 or other statements 
required under Sec.  1.1446-3(d)(2) of this chapter apply to 
partnership taxable years beginning after April 29, 2008.
    (2) [Reserved]. For further guidance, see Sec.  301.6402-3T(f)(2).

0
Par. 4. Section 301.6402-4 is revised to read as follows:


Sec.  301.6402-4  Payments in excess of amounts shown on return.

    (a) If the IRS determines that the payments by the taxpayer that 
are made within the period prescribed for payment and before the filing 
of the return exceed the amount of tax shown on the return (for 
example, excessive estimated income tax payments or excessive 
withholding), the IRS may credit or refund such overpayment without 
awaiting examination of the completed return and without awaiting the 
filing of a claim for refund. The provisions of Sec. Sec.  301.6402-2 
and 301.6402-3 are applicable to such

[[Page 43952]]

overpayment, and taxpayers should submit claims for refund (if the 
income tax return is not itself a claim for refund, as provided in 
Sec.  301.6402-3) to protect themselves in the event the IRS 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) do not apply to the overpayments described in this section.
    (b) Effective/applicability date. The rules of this section apply 
to payments made on or after July 24, 2015.

John Dalrymple,
Deputy Commissioner for Services and Enforcement.
    Approved: July 8, 2015.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2015-18119 Filed 7-23-15; 8:45 am]
BILLING CODE 4830-01-P