Tax News

CCH (cch.taxgroup.com) reports:

  The IRS has finalized proposed regulations (NPRM REG-208199-91), with one minor change, regarding the use of designated summonses and related summonses and the period of limitations on assessment under Code Sec. 6503(j) when a case is brought to enforce or quash such a summons. The regulations affect corporate taxpayers that are examined under the coordinated industry case (CIC) program and served with designated or related summonses, as well as third parties that are served with such summonses for information regarding the corporate examination.

  The final regulations generally provide that the limitations period on assessment is suspended regarding any tax return of a corporation that is the subject of a designated or related summons if a court proceeding to enforce or quash is instituted with respect to that summons. The regulations include guidance on the judicial enforcement period, court proceeding, date when the proceeding is no longer pending, final resolution, compliance, and date when compliance occurs. In addition, the regulations provide special rules addressing the number of designated and related summonses that may be issued, the time within which a court challenge to a covered summons must be brought, the computation of the suspension period when there are multiple proceedings, the computation of the 60-day period when the final day falls on a weekend or holiday, and the interaction of this suspension period with other suspension provisions.

  Regarding the date when compliance occurs, the IRS clarified in the final regulations that the examination team conducting the audit --and that team's management and supervisory chain of command --is the first point of inquiry for any examination matter. Those are the persons who will decide whether the summoned person's production satisfies the court's order.

  Once the final regulations are effective, the IRS will issue Internal Revenue Manual (IRM) procedures under which the IRS will promptly inform the CIC taxpayer of whether the production of summoned information fully complies with the summons. The IRS noted that, even without such IRM procedures, the CIC taxpayer can contact the examining agent to determine when the IRS determined full compliance and when the suspension terminated.

  The regulations are effective and applicable as of July 31, 2009.

T.D. 9455, 2009FED ¶47,024

Other References:

 
Code Sec. 6503

  CCH Reference - 2009FED ¶39,037C

  Tax Research Consultant

  CCH Reference - TRC IRS: 21,114
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