[Federal Register Volume 76, Number 112 (Friday, June 10, 2011)]
[Proposed Rules]
[Pages 34017-34019]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-14465]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-137128-08]
RIN 1545-BI36


Claims for Credit or Refund

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: 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.

DATES: Written or electronic comments and requests for a public hearing 
must be received by September 8, 2011.

ADDRESSES: 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, NW., 
Washington, DC, or sent electronically via the Federal eRulemaking 
Portal at http://www.regulations.gov (IRS REG-137128-08).

FOR FURTHER INFORMATION CONTACT: Concerning submission of comments or 
request for a hearing, [email protected], (202) 622-
7180 (not a toll-free number); concerning the proposed regulations, 
Micah A. Levy, (202) 622-3630 (not a toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    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, Sec.  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 Sec. Sec.  
301.6402-2 and 301.6402-3 and revises the reference in Sec.  301.6402-4 
to the Joint Committee on Taxation threshold referral amount under 
section 6405.

Explanation of Provisions

I. The Proper Place To File a Claim for Credit or Refund

    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 Sec.  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.

[[Page 34018]]

II. The Proper Form for Filing a Claim for Credit or Refund

    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 Sec.  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.''

III. Claims for Employment Taxes

    On July 1, 2008, final regulations (TD 9405) 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, Sec.  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.

IV. Internal Revenue Districts

    The proposed regulations make technical revisions that remove the 
reference to ``internal revenue districts'' in Sec.  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 Sec. Sec.  301.6402-3 and 301.6402-4, as those positions no 
longer exist within the IRS.

V. Outdated Provisions

    Treasury Decision 6950, 1968-1 CB 528 (33 FR 5354) (Aug. 4, 1968), 
revised paragraph (a)(2) of Sec.  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 CB 384 (41 FR 11019) (Mar. 16, 
1976), revised paragraph (c) of Sec.  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 Sec.  
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.

VI. Section 6405

    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 Sec.  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.

Proposed Effective Date

    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.

Special Analyses

    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.

Comments and Requests for a Public Hearing

    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.

[[Page 34019]]

Drafting Information

    The principal author of the proposed regulations is Micah A. Levy, 
Office of the Associate Chief Counsel (Procedure & Administration).

List of Subjects in 26 CFR Part 301

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

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 301 is proposed to be amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

    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:


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), 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 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.
    (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:


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

    (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 Sec.  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 Sec.  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:


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

    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 Sec. Sec.  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 
Sec.  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.
[FR Doc. 2011-14465 Filed 6-9-11; 8:45 am]
BILLING CODE 4830-01-P