Special deadline: filing amended returns reporting tax due within 60 days of assessment limitation.

• Author: Urban, Michael A.

When a taxpayer files an amended return reporting additional tax within 60 days before expiration of the assessment limitation period, Sec. 6501(c)(7) provides that the period within which the IRS can assess the additional tax does not expire before the 60th day after the day on which it receives the amended return. This extension of the assessment limitation period applies only to the additional tax reported on the amended return.

The legislative history of Sec. 6501(c) (7) states that the extension is intended solely to allow the IRS to process the amended return and to assess and collect the additional tax due as reported by the taxpayer. Therefore, even if, as a result of processing or inspecting the amended return, the IRS identifies other items or issues that would increase the taxpayer's liability, the additional tax attributable to those items or issues cannot be assessed after the normal assessment limitation period expires (unless some other exception to the normal three-year statute of limitation applies, such as fraud or a substantial omission of gross income).

For Sec. 6501(c)(7) to apply, the IRS must actually receive the amended return before the normal assessment limitation period expires. The IRS takes the position, as set forth in Chief Counsel Advice (CCA) 201052003, that the mailbox rule (timely mailing equals timely filing) of Sec. 7502 does not apply to an amended return reporting additional tax that is mailed on or before the last day of the limitation period but received after that date.

According to the CCA, that is because 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." 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.

Note: The IRS recognizes that the Sec. 7502 mailbox rule does apply to an amended return on which the taxpayer claims a refund or credit if the taxpayer mails the amended return on or before, but the IRS receives it after, the last day of the Sec. 6511 limitation period for refund or credit. The regulatory authority for that position is found in Regs. Secs. 301.6402-3(a)(5) and 301.7502-1(b)(2).

Payments of the Additional Tax Reported on an Amended Return

Assume that a check or money order is included...