Ford Motor Co. V. United States, (No. 10-1934) (United States Court Of Appeals For The Sixth Circuit), 2012 TNT 243-16, Aff'g Ford Motor Co. V. United States, No. 2:08-cv-12960 (E.D. Mich. 2010), 2010 TNT 108-15.
Ford also argued that section 5.05 of Revenue Procedure 84-58 supported its position. The first sentence of section 5.05 provides that "[r]emittances treated as payments of tax will be treated as any other assessed amount and compound interest will be paid on any overpayment under section 6611 of the Code...." Ford argued that this sentence is a general rule, allowing overpayment interest on remittances that are treated as payments of tax, regardless of whether the remittances were originally treated as payments or were later converted to payments. The government argued that Revenue Procedure 84-58 does not even contemplate requests to convert a deposit to a tax payment. In the government's view, a conversion of a deposit to a payment is effectively a return of this deposit, which does not accrue overpayment interest, followed by an "immediate resubmission" of the amount as an actual tax payment, which does accrue overpayment interest from the date it is treated as being resubmitted. The court found the government's "constructive return" interpretation to be "strained" because if it were correct, the taxpayer should also lose the benefit of stopping the accrual of underpayment interest for the period up to the conversion date. However, the government did not argue that Ford should lose the benefit of the deposit, stopping the accrual of underpayment interest.
The court found Ford's and the government's interpretation of the meaning of the phrase "the date of overpayment" in section 6611 to be "conflicting, plausible readings of section 6611." The court also found Ford's interpretation of section 5.05 to be "superior" to that of the government. However, because of the ambiguity, the court held that it could not conclude that Congress has "unequivocally expressed" its waiver of sovereign immunity, allowing Ford to receive overpayment interest.
Although the Sixth Circuit's opinion in Ford's case was unfavorable, there is language in the opinion that provides support for favorable taxpayer results on other remittance issues. For example, the court noted that the fact that a taxpayer can initially request that a remittance be treated as a deposit or a tax payment supports the logical inference that a taxpayer may request conversion from a deposit to tax payment. The IRS, in some recent situations, has refused to allow taxpayers to re-designate remittances.
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