Academic journal article Journal of Accountancy

Filing after the Assessment Period Ends

Academic journal article Journal of Accountancy

Filing after the Assessment Period Ends

Article excerpt

A special rule, found in Sec. 6501(c)(7), gives the IRS an additional 60 days to assess tax if the taxpayer files an amended return reporting additional tax within 60 days of the end of the limitation period. The 60-day extension is designed to allow the IRS to process the amended return and assess and collect the additional tax, and therefore the extension applies only to the additional tax reported on the return.

This means that for any other issue that the IRS identifies on the return that would increase the taxpayer's liability, the IRS must assess that additional tax before the normal limitation period expires (unless, of course, some other exception, such as fraud, applies to extend the period).

Note that the IRS does not apply the mailbox rule to returns reporting additional tax that are mailed near the end of the limitation period--in this case, timely mailing does not equal timely filing. The IRS takes the position that the mailbox rule of Sec. 7502 applies only to returns "required to be filed," while "amended returns that show additional tax due ... are not 'required to be filed' by any internal revenue laws" (Chief Counsel Advice 201052003). Thus, if in particular circumstances a taxpayer wishes the additional tax to be assessed, the taxpayer must arrange for the IRS to actually receive the amended return before the normal assessment limitation period expires.

TREATMENT OF PAYMENTS

In the situation where a taxpayer mails the amended return and payment before the end of the limitation period, but the IRS actually receives the return and payment after the period has expired, the payment is treated as a statutory overpayment under Sec. …

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