INTEREST ON UNDERPAYMENT OR OVERPAYMENT OF U.S. TAX CAUSED BY RETROACTIVE APPLICATION OF U.S.-U.K. TAX CONVENTION RUNS FROM DUE DATE OF RETURN

Rev. Proc. 84-60

SECTION 1. PURPOSE

The purpose of this revenue procedure is to modify section 4.04 of Rev. Proc. 80-18, 1980-1C.B. 623, as modified by Rev. Proc. 81-58, 1981-2 C.B. 678.

SEC. 2. BACKGROUND

01 Section 4.04 of Rev. Proc. 80-18 provides that, for purposes of section 6601 of the Internal Revenue Code, the last date prescribed for payment of U. S. income tax due for U. S. taxable years ending on or before April 24, 1980, shall be April 26, 1980, but only with respect to any additional U.S> tax due solely because the provision of the United States--United Kingdom Income Tax Conventions signed on December 31, 1975, as amended (1975) Convention), 1980-1 C.B. 394, provide less relief from U.S. income taxes than do the provision of the United States--United Kingdom Income Tax Convention signed on April 16, 1945 (1945 Convention), as amended, 1947-2 C.B. 100. Pursuant to Article 28 (Entry Into Force), and for purposes of section 6611, the date of overpayment shall be considered to be April 15, 1980, (the date the 1975 Convention entered into force), but only with respect to refunds of U.S. income tax due solely because the provision of the 1975 Convention are more favorable than the provisions of the 1945 Convention.

02 Rev. Rul. 84-133, page 25, this Bulletin,holds that the Internal Revenue Service will follow the decision in Brown & Williamson, Ltd. v. United States, 688 F 2d 747 (Ct Cl. 1982), and will pay interest with respect to refunds of U. S. Income Tax made because of retroactive application of the 1975 Convention from the original date of overpayment, as determined under the regulations under section 611 of the Code, and not from the date the 1975 Convention entered into force.

SEC. 3. PROCEDURES

Section 4 of Rev. Proc. 80-19 is modified to read as follows:

04 Interest. Interest on underpayment of any U.S. income tax due because the provisions of the 1975 Convention provide less relief from U. S. income tax than do the provisions of the 1945 Convention will be charged under section 6601 of the Code from the original due date of the return. Interest on refunds of U. S. tax made because of the provisions of the 1975 Convention are more favorable than the provisions of the 1945 Convention will be paid from the original date of overpayment, as determined under section 6611 and the regulations thereunder.

SEC. 4 EFFECT ON OTHER REVENUE PROCEDURES

Rev. Proc. 80-18, as modified by Rev. Proc. 81-58, is further modified.

SEC. 5. EFFECTIVE DATE

This revenue procedure applies to all tax years ending on or before April 25, 1980. affected by the 1975 Convention.