Tax News

CCH (cch.taxgroup.com) reports:

The IRS may either credit a tax overpayment or a decrease in tax resulting from a tentative carryback adjustment against unassessed tax liabilities identified in a proof of claim filed in a bankruptcy case. Code Secs. 6402(a) and 6411(b)
do not require a deficiency determination or assessment as a prerequisite to crediting an overpayment or a carryback adjustment to a tax liability. Generally, the IRS does not make such credits until the tax liability is determined with specificity. Outside the bankruptcy context, that means that the IRS apply a credit only after issuance of a notice of deficiency. However, a proof of claim filed in a bankruptcy case represents a specific administrative determination of the nature and amount of a tax debt. Moreover, a proof of claim is prima facie evidence of the validity and amount of the claim. Further, a bankruptcy debtor has a forum for the judicial determination of any tax debt because bankruptcy courts have the authority to determine tax liabilities identified on a proof of claim. In addition, this ruling was published in conjunction with Rev. Rul. 2007-51, which addressed the IRS's right to set off either an overpayment or a decrease in tax against amounts reflected in a notice of deficiency.
Rev. Rul. 2007-52, 2007FED ¶46,599
Other References:
Code Sec. 6402
CCH Reference - 2007FED ¶38,519.145
Code Sec. 6411
CCH Reference - 2007FED ¶38,740.30
Tax Research Consultant
CCH Reference - TRC IRS: 30,122
CCH Reference - TRC IRS: 45,200