 |
General Instructions
A Change To Note
New rules apply in certain cases to abatement of interest accrued
on deficiencies or payments for tax years beginning after
July 30, 1996. See Line 4 under Specific Instructions
for more information.
Purpose of Form. - Use Form 843 to file
a claim for refund of certain overpaid taxes, interest, penalties,
and additions to tax. For example, if on your employment tax return
you reported and paid more Federal income tax than you actually
withheld from an employee, use this form to claim a refund.
Also use Form 843 to request abatement of an overassessment (or
the unpaid portion of an overassessment) if more than the correct
amount of tax (except income, estate, and gift tax), interest,
additions to tax, or penalties have been assessed.
Do not use Form 843 to claim:
| A refund or to request an abatement of your income tax.
Individuals must use Form 1040X, Amended U.S. Individual
Income Tax Return. Corporations that filed Form
1120 or 1120-A must use Form 1120X, Amended U.S.
Corporation Income Tax Return. Other income tax filers should
file a claim on the appropriate amended tax return.
| A refund of excise taxes reported on Form
720, 730, or 2290. You must use Form
8849, Claim for Refund of Excise Taxes. Form
8849 is also used to claim refunds of excise taxes imposed
on fuels, chemicals, and other articles used for nontaxable
purposes or for which there is a reduced rate of tax.
| A refund of the required payment under section 7519. Instead,
file Form
8752, Required Payment or Refund Under Section 7519. |
| |
Generally, you must file a separate Form 843 for each tax period
and each type of tax. Exceptions are provided for certain claims in
the Specific Instructions below.
Who May File. - You may file Form 843 or
your agent may file it for you. If your agent files, the original or
a copy of Form
2848, Power of Attorney and Declaration of Representative,
must be attached.
If you are filing as a legal representative for a decedent whose
return you filed, attach to Form 843 a statement that you filed the
return and you are still acting as the representative. If you did
not file the decedent's return, attach certified copies of letters
of testamentary, letters of administration, or similar evidence to
show your authority. File Form
1310, Statement of Person Claiming Refund Due a Deceased
Taxpayer, with Form 843 if you are the legal representative of a
decedent.
Where To File. - File Form 843 with the
Internal Revenue Service Center where you filed your return. |
|
Abatement Interest
|
|
REV. PROC. 87-42
|
|
SECTION 1. PURPOSE
|
| .01 This revenue procedure provides taxpayers with instructions for filing requests
under section 6404(e)(1) of the Internal Revenue Code for abatement of interest assessed.
If the interest assessed has been paid and is abated pursuant to such request, the
interest will be refunded or credited. Section 6404(e)(1) provides the Secretary of the
Treasury with the discretionary authority to abate interest assessed or collected as a
result of an error or delay by an officer or employee of the Internal Revenue Service
(acting in an official capacity) in performing a ministerial act. Section 6404(e)(1) was
added to the Code by the Tax Reform Act of 1986(Act), section 1563(a), 1986-3 (Vol. 1)
C.B. 679. |
|
SEC. 2 BACKGROUND
|
| .01 Under section 6404(e)(1) of the Code, the Commissioner may abate an assessment of
interest on a deficiency if the interest is attributable in whole or in part to any error
or delay by an officer or employee of the Service (acting in an official capacity) in
performing a ministerial act. The Commissioner may also abate interest on certain payments
of tax to the extent that any delay in such payment is attributable to an officer or
employee being dilatory in performing a ministerial act. An error or delay is taken into
account only if no significant aspect of such error or delay can be attributed to the
taxpayer involved. |
| .02 Section 6404(e)(1) of the Code applies only to interest relating to a tax of the
type for which a notice of deficiency is required by section 6212, that is, the taxes
imposed by subtitle A of title 26 (relating to income taxes), subtitle B (relating to
estate, gift, and generation-skipping taxes), or chapters 41, 42, 43, 44, or 45 (relating
to certain excise taxes). Abatement of interest assessed or collected with respect to
employment taxes or to excise taxes other than those imposed by chapters 41 through 45 is
not authorized by section 6404(e)(1). |
| .03 Section 6404(e)(1) of the Code provides that the Service may abate the assessment
of all or any part of such interest for any period. However, the Service cannot
abate interest attributable to an error or delay that occurs before the Service contacts
the taxpayer in writing with respect to the deficiency or payment as explained in section
3.03 below. |
| .04 Section 301.6404-2T(b)(1) of the Temporary Regulations on Procedure and
Administration defines a "ministerial act" as a procedural or mechanical act
that does not involve the exercise of judgment or discretion, and that occurs during the
processing of a taxpayer's case after all prerequisites to the act, such as conferences
and review by supervisors, have taken place. A decision concerning the proper application
of federal tax law (or other federal or state law) is not a ministerial act. |
| .05 Section 1563(b)(1) of the Act states that the abatement authority applies to
interest accruing with respect to deficiencies or payments for tax periods beginning after
December 31, 1978. Section 1563(b)(2) of the Act provides that if refund or credit of any
amount resulting from the application of section 6404(e)(1) of the Code is otherwise
prevented by the operation of any law or rule of law (including res judicata), refund or
credit of such amount may, nevertheless, be made or allowed if a claim for refund or
credit is filed on or before October 22, 1987. |
|
SEC. 3. SCOPE AND OBJECTIVE
|
| .01 This revenue procedure applies to requests for abatement of interest attributable
to an error or delay by an officer or employee of the Service in performing a ministerial
act. This procedure does not apply to an abatement of interest on certain erroneous
refunds as provided in section 6404(e)(2) of the Code. |
| .02 Whether interest will be abated in a particular situation is within the discretion
of the Service. Congress did not intend that section 6404(e)(1) of the Code be used
routinely to avoid the payment of interest. Rather, Congress intended that the section be
used in situations where failure to abate interest would be "widely perceived as
grossly unfair." |
| S. Rep. No. 99-313, 99th Cong., 2d Sess. 208 (1986), 1986-3 (Vol. 3) C.B. 208. |
| .03 The Service has the authority to abate only the amount of interest that accrued
during the period attributable to the error or delay in performing the ministerial act.
Interest cannot be abated for any period if a significant aspect of the error or delay can
be attributed to the taxpayer or to a person related to the taxpayer within the meaning of
section 267(b) or 707(b)(1) of the Code. Section 6404(e)(1) applies only to errors or
delays that occur after the date the Service contacts the taxpayer in writing with respect
to the deficiency or payment. |
| Accordingly, the amount of interest that accrued prior to that date cannot be abated
regardless of the period that may have elapsed since the taxpayer's return was filed. |
|
SEC. 4. PROCEDURE
|
| .01 Requests for abatement of interest should be made on Form 843, Claim. The claim
should be filed with the Internal Revenue Service Center where the tax return was filed,
or, if the identity of that Service Center is unknown, with the Service Center where the
taxpayer's most recent tax return was filed. |
| .02 The claim should clearly state across the top "Request for Abatement of
Interest under Rev. Proc. 87-42." |
| .03 Line 5 should state the tax period involved, not the period for which abatement of
interest is claimed. |
| .04. Lines 6, 8, and 9 of Form 843 should be left blank. |
| .05 Line 7 of Form 843, Dates of Payment, should reflect dates of any payment of
interest or tax liability with respect to the tax period and type of tax to which the
claim relates. |
| .06 Line 11 of Form 843 should state: |
| 1 the type of tax involved, |
| 2 when the taxpayer was first contacted by the Service in writing with respect to the
deficiency or payment, |
| 3 the specific period for which abatement of interest is requested, |
| 4 the circumstances of the case, and |
| 5 the reason or reasons why the taxpayer believes that failure to abate the interest
would result in grossly unfair treatment. |
| .07 Generally, a separate Form 843 should be filed for each tax period for each type of
tax. However, if the interest assessment resulted from the Service's error or delay in
performing a single ministerial act that affected a tax assessment for multiple tax years
or types of tax (for example, where two or more tax years were under examination) only one
Form 843 is required. It is not necessary to compute the dollar amount of interest for
which abatement is requested. |
| .08 If a claim for abatement is denied, the taxpayer has the right to appeal that
decision to the appropriate Appeals office. |
| |
|
SEC. 5. EXAMPLES CONCERNING THE
DEFINITION OF MINISTERIAL ACT
|
| .01 Section 301.6404-2T(b)(2) of the temporary regulations contains the following
examples. |
| 1 A taxpayer moves from one state to another before the Internal Revenue Service
selects the taxpayer's income tax return for examination. |
| A letter explaining that the return has been selected for examination is sent to the
taxpayer's old address and then forwarded to the new address. The taxpayer timely
responds, asking that the audit be transferred to the Service's district office that is
nearest the new address. The group manager approves the request. After the request for
transfer has been approved, the transfer of the case is a ministerial act. The
Commissioner may (in his or her discretion) abate interest attributable to a delay in
transferring the case. |
| 2 An examination of a taxpayer's income tax return reveals a deficiency with respect to
which a notice of deficiency will be issued. After the taxpayer and the Internal Revenue
Service have identified all agreed and unagreed issues, the notice has been prepared and
reviewed (including review by District Counsel, if necessary) and any other relevant
prerequisites have been completed, the issuance of the notice of deficiency is a
ministerial act. The Commissioner may (in his or her discretion) abate interest
attributable to a delay in issuing the Notice. |
| 3 A taxpayer invested in a tax shelter and reported a loss from the tax shelter on the
taxpayer's income tax return. Internal Revenue Service personnel conducted an extensive
examination of the tax shelter, and the processing of the taxpayer's case was delayed
during such examination. Because the period of limitations on assessment was about
to expire, the taxpayer executed a consent to extend the period of limitations. The time
required to process the taxpayer's case was not a result of a delay in performing a
ministerial act; consequently, interest attributable to this period cannot be abated. |
| 4 A revenue agent is sent to a training course, and the agent's supervisor decides not
to reassign the agent's cases. During the training course, no work is done on the cases
assigned to the agent. Neither the decision to send the agent to the training course nor
the decision not to reassign the agent's cases is, under the circumstances, a ministerial
act. Thus, interest attributable to the delay cannot be abated. |
| 5 A taxpayer who claimed a loss from a tax shelter on the taxpayer's income tax return
is notified that the Internal Revenue Service intends to examine the return. However,
because of other work priorities and resource limitations, a decision is made not to
commence the examination for an extended period thereafter. The decision not to commence
the examination involves the exercise of judgment and discretion and is not a ministerial
act; consequently, interest attributable to the period of delay cannot be abated. |
|
SEC. 6. EFFECTIVE DATE
|
| This revenue procedure is effective with respect to claims for abatement of interest
accruing for taxable years beginning after December 31, 1978. If a refund or credit
resulting from the application of section 6404(e)(1) of the Code is otherwise prevented by
the statute of limitations or by operation of any law or rule of law (including res
judicata), the refund or credit may nevertheless be made or allowed if a claim is filed on
or before October 22, 1987. |
A few closely related topics & pages: This topic currently
contains information only in the "Technical" section.
abate interest ~ Abatement for reasonable cause
~ Abatement Requests - Your Rights ~ Abatement of Int or Pen - Plain English
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