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the underpayment rate under Sec. 6621.
Sec. 6611 provides that overpayment If a taxpayer disagrees with the amount of
interest will be allowed and paid on any
overpayment in respect of any internal underpayment interest imposed by the IRS
revenue tax at the overpayment rate or believes the IRS should pay additional
established under Sec. 6621.
Sec. 6621 defines the applicable rates overpayment interest, the taxpayer may file an
for both underpayment and overpay- administrative claim/request with the IRS.
ment interest, which are determined on
a quarterly basis. Further, Sec. 6621(d)
provides that a net interest rate of zero
applies to interest accruing on or after claim is filed within the three-year period, but with insufficient overpayment inter-
Oct. 1, 1998 (and if certain conditions the amount that the IRS may refund est — a claim for additional overpay-
are met, to interest accruing before Oct. or credit is limited to the amount of ment interest may arise. Such a claim
1, 1998) on equivalent overlapping tax tax (including interest) paid within the is not a refund claim governed by the
underpayments and tax overpayments period, immediately preceding the filing refund procedures in Sec. 6511 and
(so-called interest netting). of the claim, equal to three years plus the related provisions. Instead, it constitutes
Note: This item focuses on interest period of any extension of time for filing a general claim against the government
netting between different tax periods the return (Sec. 6511(b)(2)(A)). If the and, as such, is governed by the six-year
and/or types of tax (“net rate” netting claim is filed within the two-year period, limitation period of 28 U.S.C. Sections
claims). Special rules beyond the scope the amount that the IRS may refund or 2401 and 2501 (Alexander Proudfoot Co.,
of this discussion apply to interest credit is limited to the amount of tax 454 F.2d 1379, 1384 (Ct. Cl. 1972)).
netting within a single tax period (including interest) paid during the two In the U.S. Code, 28 U.S.C. Section
(within-module netting). years immediately preceding the filing of 2401 provides that “every civil action
If a taxpayer disagrees with the the claim (Sec. 6511(b)(2)(B)). commenced against the United States
amount of underpayment interest If the IRS formally disallows a shall be barred unless the complaint is
imposed by the IRS or believes the taxpayer’s claim for refund or credit filed within six years after the right of
IRS should pay additional overpay- of underpayment interest, or does not action first accrues.” Furthermore, 28
ment interest, the taxpayer may file an act on it within six months, a taxpayer U.S.C. Section 2501 states that “[e]very
administrative claim/request with the generally may file a refund suit in a U.S. claim of which the United States Court
IRS. Rev. Proc. 2000-26 provides that an district court or the U.S. Court of Fed- of Federal Claims has jurisdiction shall
interest-netting claim must be filed on a eral Claims. Sec. 6532 provides a two- be barred unless the petition thereon is
Form 843, Claim for Refund and Request year limitation period from the date of filed within six years after such claim
for Abatement. In certain contexts (noted the disallowance for filing a refund suit. first accrues.”
below), a taxpayer may not be required This two-year period can be extended by The six-year period of limitation
to file a Form 843 administrative claim agreement by the IRS and the taxpayer. applicable to a claim for additional over-
and simply may file suit against the Form 907, Agreement to Extend the Time payment interest begins when the cause
government. In each context, the ques- to Bring Suit, is used for that purpose. of action for overpayment interest first
tion arises: When is it too late to file The filing of an administrative claim accrues, which is the date the related
the claim? for refund or credit, and its actual or credit or refund is allowed (Barnes, 137
deemed disallowance, are prerequisites F. Supp. 716 (Ct. Cl. 1956), cert. denied,
Refund procedures to the filing of a refund suit for previ- 351 U.S. 933 (1956)). That is the date
A claim seeking a refund or credit of ously paid underpayment interest (Sec. the IRS authorizes the scheduling of
overpaid underpayment interest must be 7422(a)). an overassessment (Sec. 6407; see also
filed within the period of limitation General Instrument Corp., 33 Fed. Cl. 4
provided in Sec. 6511. In this context, Period of limitation for filing (1995)).
the claim generally must be filed by the general claims against the Regs. Sec. 301.6407-1 provides fur-
later of (1) three years from the time the government ther that the date on which the district
return (to which the interest relates) was If a taxpayer disagrees with the amount director, the director of the regional
filed or (2) two years from the time the of overpayment interest allowed by the service center, or an authorized certify-
payment was made (Sec. 6511(a)). If the IRS — for example, a refund is issued ing officer designated by either of them

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