Authority to Make Credits or Refunds

Number: 202141023
Release Date: 10/15/2021
ID:
UILC:
CCA_2021090711494204
1378.00-00, 444.00-00, 6402.00-
00
From:---
Sent: Wednesday, September 1, 2021 4:48 PM
To: ---
---
---
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Subject: RE: TAMIS: 7337481 - more advice from Counsel
Thanks for your patience while I explored again whether changing the accounting period could help. Unfortunately, one of the accounting experts in Counsel has confirmed that it is not a viable solution for several reasons. Take a look at Rev. Proc. 2006-46. Here is the pertinent section:
S corporations. Section 1378 and § 1.1378-1(a) provide that the taxable year of an
S corporation must be a permitted year. The term “permitted year” means (1) the required taxable year (i.e., a taxable year ending on December 31), (2) a taxable year elected under § 444, (3) a 52-53-week taxable year ending with reference to the required taxable year or a taxable year elected under § 444, or (4) any other accounting period for which the corporation establishes to the satisfaction of the Commissioner a business purpose.
Because the taxpayer already has a 12/31 year-end, the taxpayer would need to change to some other accounting period but would have to have a business purpose that would satisfy the Commissioner. It is Counsel’s position that a change in accounting period simply to get a refund sooner than usual (even recognizing the sympathetic nature of this case) is not a business purpose that would satisfy the Commissioner. In addition, the taxpayer would have to pay a user fee of $5,000 for the requested change in accounting period. Further, the change of accounting period process could take several months.
I know this has been a frustrating case but I simply do not see any way to return the excess funds until the return has been filed and the liability assessed.
--- – please post in ---– Overpaid Federal Tax Deposit, POSTN-116300-
21. give-