Jan. 18, 2013
/PRNewswire/ -- Ford submitted remittances to the Internal Revenue Service (IRS), pursuant to Revenue Procedure 84-58, 1984-2 C.B. 501, superseded by Revenue Procedure 2005-18, 2005-1 C.B. 798, to stop the accrual of underpayment interest related to 30-day letters it received from the IRS. Ford designated these remittances as deposits in the nature of a cash bond, but subsequently, Ford requested that the IRS treat the remittances as advance payments. The IRS complied with the request. Eventually, the IRS determined that Ford overpaid its taxes. The resultant refunds included interest under section 6611 computed from the dates when the deposits were converted to advance payments and not from when Ford originally made the deposits.
Ford sued for approximately
in overpayment interest computed from the original deposit dates. The Sixth Circuit agreed with the government that interest under section 6611 accrued only from the later dates when the deposits were converted to payments.
Section 6611 does not define "the date of overpayment." The government argued that there can be no "overpayment" under section 6611, unless there has been a "payment," and there was no payment until Ford requested that its deposits be converted into payments. Prior to the conversion date, the remittances were treated as deposits, and Ford could have requested that the funds be returned at any time. Ford argued that section 6611 and section 6601 should be interpreted symmetrically. Section 6601 stops the accrual of underpayment interest on the date the tax is "paid," and section 6611 starts the accrual of overpayment interest on the "date of the overpayment." Because its deposits stopped the accrual of interest under section 6601 from the deposit dates, Ford argued that those deposit dates should also be considered the payment dates for purposes of determining the date of overpayment under section 6611.