Rev. Rul. 56-506

Advice has been requested whether the three-year period of limitations, prescribed by section 6511 of the Internal Revenue Code of 1954 for filing claim for credit or refund of an overpayment of tax, applies to accrued interest allowable under section 6611 with respect to an allowed credit for overpayment of excise tax taken on an excise tax return.

Section 6611 of the Code provides that interest shall be allowed and paid upon any overpayment in respect of any internal revenue tax at the rate of 6 percent per annum. Such interest shall be allowed in the case of a credit from the date of the overpayment to the due date of the amount against which the credit is taken or the return.

Section 6511 of the Code provides that claim for credit or refund of an overpayment of any tax imposed by the Internal Revenue Code in respect of which tax the taxpayer is required to file a return shall be filed by the taxpayer within three years from the time the return was required to be filed.

Pursuant to the provisions of sections 6601(f) and 6659 of the Code, the term "tax" as used in section 6511 includes penalties and interest imposed by the Code in addition to the tax. Therefore, the three-year period of limitation provided by section 6511 of the Code applies only to a claim for credit or refund of tax, penalty and interest, collected from a taxpayer.

Under the provisions of sections 2401 and 2501 of Title 28 of the United States Code no allowance of interest on a refund or credit of an overpayment of tax may be made after the expiration of six years from the date of the allowance of the refund or credit unless the taxpayer has filed a civil action against the United States within such period. Colgate-Palmolive-Peet Co. v. United States, 58 Fed. (2d) 499, Ct. D. 554, C. B. XI-2, 421 (1932); Donald C. Barnes, Trustee in Dissolution for Engineers Public Service Co. v. United States, 137 Fed Supp. 716.

Pursuant to the above provisions of law, the allowance of accrued interest under section 6611 of the Code with respect to a credit taken on an excise tax return for overpayment of excise tax may not be made after the expiration of six years from the date of the allowance of the credit unless suit therefor has been filed within such period.

The foregoing ruling applies, of course, only in cases where interest on refunds or credits is legally payable; it has no application where the payment of interest on refunds or credits is specifically restricted by law. For cross references to those sections of the Code containing restrictions on payment of interest, see section 6612(b) and (c).