[Federal Register Volume 59, Number 108 (Tuesday, June 7, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13742]
[[Page Unknown]]
[Federal Register: June 7, 1994]
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DEPARTMENT OF THE TREASURY
Bureau of Alcohol, Tobacco and Firearms
27 CFR Part 70
[T.D. ATF-358]
RIN 1512-AB27
Clarification of Periods of Interest With Respect to Certain
Overpayments (T92-122)
AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Treasury.
ACTION: Treasury decision, final rule.
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SUMMARY: This Treasury decision amends 27 CFR 70.92, in Part 70,
Procedure and Administration. The amendments clarify the period during
which interest is allowed on taxpayer overpayments which are credited
against other liabilities of the same taxpayer for interest and certain
additions to the tax. The amendments are necessary as a result of
changes to the law made by the Tax Equity and Fiscal Responsibility Act
of 1982 and the Deficit Reduction Act of 1984. The regulations affect
all taxpayers who have overpayments credited against underpayments.
EFFECTIVE DATE: These regulations are effective on June 7, 1994.
FOR FURTHER INFORMATION CONTACT:
Jackie White of the Tax Compliance Branch, (202) 927-8220, Bureau of
Alcohol, Tobacco and Firearms, P.O. Box 50221, Washington, DC 20091-
0221 ((202) 927-8220).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments to the regulations on Procedure
and Administration (27 CFR part 70) under Sec. 6611 of the Internal
Revenue Code of 1986 (IRC) to clarify the period during which interest
is allowed on overpayments that are credited against a taxpayer's
liability for interest and certain additions to the tax. The amendments
will conform the regulations to Sec. 344 of the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA) (Pub. L. 97-248, 96 Stat. 635), and
Sec. 158 of the Deficit Reduction Act of 1984 (DEFRA) (Pub. L. 98-369,
98 Stat. 696).
The Internal Revenue Service (IRS) applies Sec. 6611 to the taxes
it administers and enforces. The IRS published a notice of proposed
rulemaking in the Federal Register on August 25, 1992 (57 FR 38457),
and Treasury Decision 8524 (59 FR 10075) was published in the Federal
Register on March 3, 1994, adopting final rules implementing the TEFRA
and DEFRA amendments. ATF believes these regulations are equally
applicable to its tax collection activities and is adopting such
regulations.
Interest on Overpayments That Are Credited Against Interest on
Underpayments
Section 6611(a) of the IRC provides that interest shall be allowed
and paid on any overpayment in respect of any internal revenue tax at
the overpayment rate established under Sec. 6621.
Under Sec. 6402(a), the Secretary may credit any overpayment
(including any interest allowed thereon) against any liability imposed
on the taxpayer under the IRC. Under Sec. 6611(b)(1), interest is
allowed on an overpayment that is so credited from the date of the
overpayment to the due date of the taxpayer's liability against which
the overpayment is credited. For purposes of this interest computation,
a definition of the term ``due date'' is provided in Sec. 70.92(d) of
the regulations.
Generally, Sec. 6601(f) provides that once an overpayment is
credited to satisfy a taxpayer's liability, interest no longer accrues
on that liability. Section 344 of TEFRA added Sec. 6622 of the IRC,
which requires interest imposed by the IRC to be compounded daily. The
effect of Sec. 6601(f) on the compounding requirement of Sec. 6622 is
that once an overpayment is credited to satisfy the taxpayer's
liability for interest, that credit cuts off any further compounding of
the interest (i.e., interest no longer accrues on the taxpayer's
interest liability against which the credit has been made).
Similarly, it is appropriate that no interest liability to the
taxpayer accrues on the overpayment once the overpayment is credited to
satisfy the taxpayer's liability for interest. Thus, the regulations
amend Sec. 70.92(d)(2)(iii) to clarify that interest ceases to accrue
on any portion of an overpayment that is credited against the
taxpayer's liability for interest.
Interest on Overpayments That Are Credited Against Certain Additions to
the Tax
Prior to DEFRA, interest only accrued on additions to the tax from
the date of notice and demand, and then only if not paid within 10 days
from the date of notice and demand. In Sec. 158 of DEFRA, Congress
added Sec. 6601(e)(2)(B) to the IRC, requiring taxpayers to pay
interest on certain additions to tax from the due date of the relevant
return (including any extensions) until the addition to the tax is
paid. The number of additions to the tax that bear interest from the
due date of the return was increased by Congress in 1988 and again in
1989. This regulation amends Sec. 70.92(d)(2)(iv) to clarify that
interest ceases to accrue on any portion of an overpayment that is
credited against certain additions to the tax for any period after the
due date of the return (including extensions) to which the addition to
the tax relates.
Prior Regulations Obsolete
When ATF assumed responsibility for the collection and enforcement
of taxes imposed under Subtitle E of the IRC, it patterned many of its
procedural regulations upon those already promulgated by the IRS. See,
e.g., T.D. ATF-301, 55 Fed. Reg. 47608 (November 14, 1990); T.D. ATF-
251, 52 Fed. Reg. 19314 (May 22, 1987). However, since enactment of
Sec. 6622 of the IRC in TEFRA and Sec. 6601(e)(2)(B) in DEFRA, the
prior regulations regarding interest and certain additions to tax have
been obsolete. Accordingly, ATF has been computing interest consistent
with the statutory changes and these regulatory amendments acknowledge
existing agency practice.
Regulatory Flexibility Act
The provisions of the Regulatory Flexibility Act relating to a
final regulatory flexibility analysis (5 U.S.C. 604) are not applicable
to this final rule because the agency was not required to publish a
general notice of proposed rulemaking under 5 U.S.C. 553 or any other
law. A copy of this final rule has been submitted to the Administrator
of the Small Business Administration for comment on the impact of such
regulation on small business, pursuant to 26 U.S.C. 7805(f).
Executive Order 12866
It has been determined that this rule is not a significant
regulatory action because (1) it will not have an annual effect on the
economy of $100 million or more or adversely affect in a material way
the economy, a sector of the economy productivity, competition, jobs,
the environment, public health or safety, or State, local or tribal
governments or communities; (2) create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raise novel legal or policy issues arising out of legal
mandates, the Presidents priorities, or the principles set forth in
Executive Order 12866.
Administrative Procedures Act
Because this final rule merely adopts existing IRS procedural
regulations regarding overpayment interest, it is found to be
unnecessary to issue this Treasury decision for notice and public
procedure pursuant to 5 U.S.C. 553(b) or subject to the effective date
limitation in 5 U.S.C. 553(d).
Paperwork Reduction Act
The provisions of the Paperwork Reduction Act of 1980, Pub. L. No.
96-511, 44 U.S.C. Chapter 35, and its implementing regulations, 5 CFR
Part 1320, do not apply to this final rule because it does not impose
any new recordkeeping or reporting requirements.
Drafting Information
The principal author of this document is Jackie White of the Tax
Compliance Branch, Bureau of Alcohol, Tobacco and Firearms.
List of Subjects in 27 CFR Part 70
Administrative practice and procedure, Alcohol and alcoholic
beverages, Authority delegations, Bankruptcy, Claims, Excise taxes,
Firearms and ammunition, Government employees, Law enforcement, Law
enforcement officers, Penalties, Reporting and recordkeeping
requirements, Seizures and forfeitures, Surety bonds, Tobacco.
Authority and Issuance
Title 27 CFR is amended as follows:
PART 70--[AMENDED]
Paragraph 1. The authority citation for part 70 continues to read
as follows:
Authority: 5 U.S.C. 301 and 552; 26 U.S.C. 4181, 4182, 5146,
5203, 5207, 5275, 5367, 5415, 5504, 5555, 5684(a), 5741, 5761(b),
6020, 6021, 6064, 6102, 6155, 6159, 6201, 6203, 6204, 6301, 6303,
6311, 6313, 6314, 6321, 6323, 6325, 6326, 6331-6343, 6401-6404,
6407, 6416, 6423, 6501-6503, 6511, 6513, 6514, 6532, 6601, 6602,
6611, 6621, 6622, 6651, 6653, 6656, 6657, 6658, 6665, 6671, 6672,
6701, 6723, 6801, 6862, 6863, 6901, 7011, 7101, 7102, 7121, 7122,
7207, 7209, 7214, 7304, 7401, 7403, 7406, 7423, 7424, 7425, 7426,
7429, 7430, 7432, 7502, 7503, 7505, 7506, 7513, 7601-7606, 7608-
7610, 7622, 7623, 7653, 7805.
Para. 2. Section 70.92 is amended by revising paragraphs
(d)(2)(iii) and (d)(2)(iv) to read as follows:
Sec. 70.92 Interest on overpayments.
* * * * *
(d) * * *
(2) * * *
(iii) Interest. In the case of a credit against interest that
accrues for any period ending prior to January 1, 1983, the due date is
the earlier of the date of assessment of such interest or December 31,
1982. In the case of a credit against interest that accrues from any
period beginning on or after December 31, 1982, such interest is due as
it economically accrues on a daily basis, rather than when it is
assessed.
(iv) Additional amount, addition to the tax, or assessable penalty.
In the case of a credit against an additional amount, addition to the
tax, or assessable penalty, the due date is the earlier of the date of
assessment or the date from which such amount would bear interest if
not satisfied by payment or credit.
* * * * *
Signed: May 11, 1994.
Daniel R. Black,
Acting Director.
Approved: May 19, 1994.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 94-13742 Filed 6-6-94; 8:45 am]
BILLING CODE 4810-31-M