Refund for Overpayment Allowed When Official Signs Form

[5] Section 6407 provides that "The date on which the Secretary first authorizes the scheduling of an overassessment in respect of any internal revenue tax shall be considered as the date of allowance of refund or credit in respect of such tax."

[6] Income Tax Regulations section 301.6407-1 provides that "The date on which the district director or the director of the regional service center, or an authorized certifying officer designated by either of them, first certifies the allowance of an overassessment in respect of any internal revenue tax shall be considered as the date of allowance of refund or credit in respect of such tax."

[7] The Court of Federal Claims, in General Instrument Corp. v. U.S., 33 Fed. Cl. 4 (1995), held that an overassessment of income taxes was scheduled within the meaning of section 6407 when the certifying official signed a Form 2188, Voucher and Schedule of Overpayments and Overassessments. Therefore, as applied to section 6511, the date the certifying official signs the Form 2188 is also the date the credit or refund is allowed.

[8] We recognize that in Rev. Rul. 78-127, 1978-1 C.B. 436, the Service, in discussing section 6407, states that "The certifying officer authorizes a credit or refund by signing a Form 1166, Voucher and Schedule of Payments, identifying the taxpayer and the amount of the overassessment." We contend that this statement is correct insofar as it is construed to mean that the Form 1166 authorizes the release of funds. To read Rev. Rul. 78-127 to stand for the proposition that Form 1166 schedules the overassessment, however, is erroneous.

[9] As was noted in General Instruments, Forms 1166 and 2188 serve different functions. In its analysis, the court differentiated between the purpose served by Form 2188, scheduling the overassessment, and the purpose served by Form 1166, Voucher and Schedule of Payment, authorizing the refund check. General Instruments Corp. v. U.S., 33 Fed. Cl. at 5. This distinction also is delineated in the Internal Revenue Manual which states that "The Manual Refund function will prepare Form 2188, Voucher and Schedule of Overpayment and Overassessments, . . . to certify the amounts of overassessments . . . . The refund amount will be scheduled on Form 1166." IRM 3.17.46.2.5t5),(6) Certification of Overassessment; see also IRM 3.17.63.18.2.1(2) Voucher and Schedule of Overpayment and Overassessments ("Form 2188 should be prepared for the abatement (credit). Form 1166 (Voucher and Schedule of Payments) should be prepared for the refund (debit)").

[10] If you have any additional questions, please call Amy Pfalzgraf at 622-4930.