Collection After Assessment, 10572-10574 [05-4280]

Download as PDF 10572 Federal Register / Vol. 70, No. 42 / Friday, March 4, 2005 / Proposed Rules (b) Examples of circumstances where good cause may exist include, but are not limited to, the following situations: (1) You were seriously ill and were prevented from contacting us in person, in writing, or through a friend, relative, or other person. (2) There was a death or serious illness in your immediate family. (3) Important records were destroyed or damaged by fire or other accidental cause. (4) You were trying very hard to find necessary information to support your claim but did not find the information within the stated time periods. (5) You asked us for additional information explaining our action within the time limit, and within 60 days of receiving the explanation you requested a review. (6) We gave you incorrect or incomplete information about when and how to request administrative review. (7) You did not receive notice of the initial determination. (8) You sent the request to another Government agency in good faith within the time limit and the request did not reach us until after the time period had expired. (9) Unusual or unavoidable circumstances exist, including the circumstances described in paragraph (a)(4) of this section, which show that you could not have known the need to file timely, or which prevented you from filing timely. § 418.3645 Can you request that the decision-maker be disqualified? The person designated to conduct your hearing will not conduct the hearing if he or she is prejudiced or partial with respect to any party or has any interest in the matter pending for decision. If you object to the person who will be conducting your hearing, you must notify us at your earliest opportunity. The Commissioner or the Commissioner’s designee will decide whether to appoint another person to conduct your hearing. § 418.3650 How do we make our decision upon review? After you request review of our initial determination, we will review the information that we considered in making the initial determination and any other information we receive. We will make our decision based on this information. The issues that we will review are the issues with which you disagree. We may consider other issues, but we will provide you with advance notice of these other issues as explained in § 418.3625. If you are dissatisfied with our final decision, you may file an action in Federal district court. VerDate jul<14>2003 14:54 Mar 03, 2005 Jkt 205001 § 418.3655 How will we notify you of our decision after our review? § 418.3680 What happens if your case is remanded by a Federal court? We will mail a written notice of our decision on the issue(s) you appealed to you at your last known address. Generally, we will not send a notice if your subsidy stops because of your death. The written notice that we send will tell you: (a) What our decision is; (b) The reasons for our decision; (c) The effect of our decision; and (d) Your right to judicial review of the decision. When a Federal court remands a case to the Commissioner for further consideration, the decision-maker (as described in § 418.3670) acting on behalf of the Commissioner, may make a decision. That component will follow the procedures in § 418.3625, unless we decide that we can make a decision that is wholly favorable to you without another hearing. Any issues relating to your subsidy may be considered by the decision-maker whether or not they were raised in the administrative proceedings leading to the final decision in your case. § 418.3665 Can your request for a hearing or case review be dismissed? We will dismiss your request for a hearing or case review under any of the following conditions: (a) At any time before notice of the decision is mailed, you ask that your request for administrative review be withdrawn; or (b) You failed to request administrative review timely and did not have good cause for missing the deadline for requesting review. [FR Doc. 05–4097 Filed 3–3–05; 8:45 am] § 418.3670 How will you be notified of the dismissal? Collection After Assessment We will mail a written notice of the dismissal of your request for administrative review to you at your last known address. The dismissal is not subject to judicial review and is binding on you unless we vacate it. The decision-maker may vacate any dismissal of your request for administrative review if, within 60 days after the date you receive the dismissal notice, you request that the dismissal be vacated and show good cause why the request should not be dismissed. The decision-maker shall advise you in writing of any action he or she takes. § 418.3675 you? How does our decision affect Our decision is binding unless you file an action in Federal district court seeking review of our final decision. You may file an action in Federal district court within 60 days after the date you receive notice of the decision. You may request that the time for filing an action in Federal district court be extended. The request must be in writing and it must give the reasons why the action was not filed within the stated time period. The request must be filed with the decision-maker who issued the final decision in your case. If you show that you had good cause for missing the deadline, we will extend the deadline. We will use the standards in § 418.3640 to decide if you had good cause to miss the deadline. PO 00000 Frm 00064 Fmt 4702 Sfmt 4702 BILLING CODE 4191–02–P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 301 [REG–148701–03] RIN 1545–BC72 Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking. AGENCY: SUMMARY: This document contains proposed regulations relating to the collection of tax liabilities after assessment. The proposed regulations reflect changes to the law made by the Internal Revenue Service Restructuring and Reform Act of 1998. These regulations would affect persons determining how long the Internal Revenue Service has to collect taxes that have been properly assessed. DATES: Written or electronically generated comments and requests for a public hearing must be received by June 2, 2005. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG–148701–03), room 5203, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG–148701–03), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC, or sent electronically, via the IRS Internet site at https://www.irs.gov/regs or via the Federal eRulemaking Portal at https:// www.regulations.gov (indicate IRS and REG–148701–03). FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Debra A. E:\FR\FM\04MRP1.SGM 04MRP1 Federal Register / Vol. 70, No. 42 / Friday, March 4, 2005 / Proposed Rules Kohn, (202) 622–7985; concerning submissions of comments or requests for a hearing, Guy Traynor, (202) 622–7180 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Background This document contains proposed amendments to the Procedure and Administration Regulations (26 CFR part 301) under section 6502 of the Internal Revenue Code (Code). The regulations reflect the amendment of the Code by section 3461 of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 1998) (Public Law 105–206, 112 Stat. 685, 764). Collection of Tax Liabilities After Assessment Under Section 6502 Pursuant to section 6502 of the Code, the IRS generally has 10 years from the date of assessment to collect a timely assessed tax liability. Prior to January 1, 2000, the effective date of section 3461 of RRA 1998, section 6502 permitted the IRS to enter into agreements with the taxpayer to extend the period of limitations on collection at any time prior to the expiration of the period provided in section 6502. Prior to the enactment of RRA 1998, the IRS used these collection extension agreements, or waivers, in various circumstances to protect its ability to collect a tax liability beyond the original 10-year period of limitations on collection. For example, the IRS historically conditioned consideration of an offer in compromise upon the execution of a collection extension agreement or waiver. In addition, the Code contains several provisions that operate to toll the period of limitations on collection upon the occurrence of certain events. For example, section 6331(k) operates in part to suspend the period of limitations on collection for the period of time during which an offer in compromise is pending, for 30 days after rejection, and while a timely filed appeal is pending. Similarly, section 6503(h) operates to suspend the period of limitations on collection for the period of time during which the IRS is prohibited from collecting a tax due to a bankruptcy proceeding, and for 6 months thereafter. These statutory suspension provisions toll the period of limitations on collection even if the period of limitations on collection previously has been extended pursuant to an executed collection extension agreement. See Klingshirn v. United States (In re Klingshirn), 147 F.3d 526 (6th Cir. 1998). Section 3461 of RRA 1998 amended section 6502 of the Code to limit the ability of the IRS to enter into VerDate jul<14>2003 14:54 Mar 03, 2005 Jkt 205001 agreements extending the period of limitations on collection. Section 3461 of RRA 1998 also included an off-Code provision governing the continued effect of collection extension agreements executed on or before December 31, 1999. Explanation of Provisions The proposed regulations incorporate the amendments made by section 3461 of RRA 1998. The proposed regulations provide that the IRS may enter into an agreement to extend the period of limitations on collection if an extension agreement is executed: (1) At the time an installment agreement is entered into; or (2) prior to release of a levy pursuant to section 6343, if the release occurs after the expiration of the original period of limitations on collection. The proposed regulations also incorporate the off-Code provision in section 3461(c) of RRA 1998 governing the continued effectiveness of extension agreements executed on or before December 31, 1999. The proposed regulations provide that if the extension agreement was executed in connection with an installment agreement on or before December 31, 1999, the extension agreement expires on the 90th day after the date agreed upon in the extension agreement. The proposed regulations provide that any other extension agreement executed on or before December 31, 1999, expires on the later of: (1) December 31, 2002, or if earlier, the date of which the extension agreement expired by its terms; or (2) the end of the original 10-year statutory period. Special Analysis It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because these regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Comments and Requests for a Public Hearing Before these proposed regulations are adopted as final regulations, PO 00000 Frm 00065 Fmt 4702 Sfmt 4702 10573 consideration will be given to any written comments (a signed original and eight (8) copies) or electronically generated comments that are submitted timely to the IRS. The IRS and Treasury Department request comments on the clarity of the proposed rule and how it may be made easier to understand. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by a person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the hearing will be published in the Federal Register. Drafting Information The principal author of these regulations is Aaron D. Gregory of the Office of the Associate Chief Counsel (Procedure and Administration), Collection, Bankruptcy & Summonses Division. List of Subjects in 26 CFR Part 301 Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR part 301 is proposed to be amended as follows: PART 301—PROCEDURE AND ADMINISTRATION Paragraph 1. The authority citation for part 301 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * Par. 2. Section 301.6502–1 is revised to read as follows: § 301.6502–1 Collection after assessment. (a) General rule. In any case in which a tax has been assessed within the applicable statutory period of limitations on assessment, a proceeding in court to collect the tax may be commenced, or a levy to collect the tax may be made, within 10 years after the date of assessment. (b) Agreement to extend the period of limitations on collection. The Secretary may enter into an agreement with a taxpayer to extend the period of limitations on collection in the following circumstances: (1) Extension agreement entered into in connection with an installment agreement. If the Secretary and the taxpayer enter into an installment agreement for the tax liability prior to the expiration of the period of limitations on collection, the Secretary E:\FR\FM\04MRP1.SGM 04MRP1 10574 Federal Register / Vol. 70, No. 42 / Friday, March 4, 2005 / Proposed Rules and the taxpayer, at the time the installment agreement is entered into, may enter into a written agreement to extend the period of limitations on collection to a date certain. A written extension agreement entered into under this paragraph shall extend the period of limitations on collection until the 89th day after the date agreed upon in the written agreement. (2) Extension agreement entered into in connection with the release of a levy under section 6343. If the Secretary has levied on any part of the taxpayer’s property prior to the expiration of the period of limitations on collection and the levy is subsequently released pursuant to section 6343 after the expiration of the period of limitations on collection, the Secretary and the taxpayer, prior to the release of the levy, may enter into a written agreement to extend the period of limitations on collection to a date certain. A written extension agreement entered into under this paragraph shall extend the period of limitations on collection until the date agreed upon in the extension agreement. (c) Continued effectiveness of agreements to extend the period of limitations on collection entered into on or before December 31, 1999—(1) In general. Except as provided in paragraph (c)(2) of this section, if, on or before December 31, 1999, the Secretary and the taxpayer entered into a written agreement to extend the period of limitations on collection for a tax liability to a date after December 31, 2002, then, unless the written agreement expires by its terms prior to December 31, 2002, the period of limitations on collection expires on the later of— (i) The last day of the original 10-year statutory period; or (ii) December 31, 2002. (2) Written agreements entered into in connection with installment agreements. If, on or before December 31, 1999, the Secretary and the taxpayer, in connection with an installment agreement, entered into a written agreement to extend the period of limitations on collection for a tax liability, the written agreement extends the period of limitations on collection until the 90th day after the date agreed upon in the written agreement. (d) Proceeding in court for the collection of the tax. If a proceeding in court for the collection of a tax is begun within the period provided in paragraph (a) of this section (or within any extended period as provided in paragraphs (b) and (c) of this section), the period during which the tax may be collected by levy is extended until the liability for the tax or a judgment against VerDate jul<14>2003 14:54 Mar 03, 2005 Jkt 205001 the taxpayer arising from the liability is satisfied or becomes unenforceable. (e) Effect of statutory suspensions of the period of limitations on collection if executed collection extension agreement is in effect—(1) Any statutory suspension of the period of limitations on collection tolls the running of the period of limitations on collection, as extended pursuant to an executed extension agreement under paragraph (b) or (c) of this section, for the amount of time set forth in the relevant statute. (2) The following example illustrates the principle set forth in this paragraph (e): Example. In June of 2003, the Internal Revenue Service (IRS) enters into an installment agreement with the taxpayer to provide for periodic payments of the taxpayer’s timely assessed tax liabilities. At the time the installment agreement is entered into, the taxpayer and the IRS execute a written agreement to extend the period of limitations on collection. The extension agreement executed in connection with the installment agreement operates to extend the period of limitations on collection to the date agreed upon in the extension agreement, plus 89 days. Subsequently, and prior to the expiration of the extended period of limitations on collection, the taxpayer files a bankruptcy petition under chapter 7 of the Bankruptcy Code and receives a discharge from bankruptcy a few months later. Section 6503(h) of the Internal Revenue Code operates to suspend the running of the previously extended period of limitations on collection for the period of time the IRS is prohibited from collecting due to the bankruptcy proceeding, and for 6 months thereafter. The new expiration date for the IRS to collect the tax is the date agreed upon in the previously executed extension agreement, plus 89 days, plus the period during which the IRS is prohibited from collecting due to the bankruptcy proceeding, plus 6 months. (f) Date when levy is considered made. The date on which a levy on property or rights to property is considered made is the date on which the notice of seizure required under section 6335(a) is given. (g) Effective date. This section is applicable on the date final regulations are published in the Federal Register. Mark E. Matthews, Deputy Commissioner of Services and Enforcement. [FR Doc. 05–4280 Filed 3–3–05; 8:45 am] BILLING CODE 4830–01–P PO 00000 Frm 00066 Fmt 4702 Sfmt 4702 OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION 29 CFR Parts 2200 and 2204 Revisions to Procedural Rules Governing Practice Before the Occupational Safety and Health Review Commission Occupational Safety and Health Review Commission. ACTION: Notice of proposed rulemaking. AGENCY: SUMMARY: This document proposes several revisions to the procedural rules governing practice before the Occupational Safety and Health Review Commission. DATES: Comments must be received by April 4, 2005. FOR FURTHER INFORMATION CONTACT: Patrick Moran, Deputy General Counsel, (202) 606–5410, 1120 20th St., NW., Ninth Floor, Washington, DC 20036– 3457. SUPPLEMENTARY INFORMATION: On June 17, 2004 the Commission published an Advanced Notice of Proposed Rulemaking (ANPR), 69 FR 33878. In that notice the Commission announced that it was considering revisions to its rules concerning electronic filing, the expansion of the range of cases eligible for E–Z Trial, and the Settlement Part, the availability of sanctions for rules violations and expanding the authority of administrative law judges to impose such sanctions, the grounds for obtaining Commission review of interlocutory orders issued by its judges, and the restriction of practice before the Commission of lawyers and in-house company and union representatives. The Commission solicited public comments regarding these areas and invited the public to suggest other changes. The Commission thanks those who responded to the ANPR. The comments were helpful and played a large part in aiding the Commission to formulate these proposed rule changes. Now, the Commission asks for comments on these proposed rule changes, especially from those who practice before it. Having considered the comments filed in response to the ANPR, this document proposes several revisions governing practice before the Occupational Safety and Health Review Commission. Although a few of the revisions are technical and clarifying in nature, this proposal also contains several significant changes to Commission practice and procedure. For example, the Commission is proposing new rules to allow and facilitate electronic service and filing of E:\FR\FM\04MRP1.SGM 04MRP1

Agencies

[Federal Register Volume 70, Number 42 (Friday, March 4, 2005)]
[Proposed Rules]
[Pages 10572-10574]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-4280]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[REG-148701-03]
RIN 1545-BC72


Collection After Assessment

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: This document contains proposed regulations relating to the 
collection of tax liabilities after assessment. The proposed 
regulations reflect changes to the law made by the Internal Revenue 
Service Restructuring and Reform Act of 1998. These regulations would 
affect persons determining how long the Internal Revenue Service has to 
collect taxes that have been properly assessed.

DATES: Written or electronically generated comments and requests for a 
public hearing must be received by June 2, 2005.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-148701-03), room 
5203, Internal Revenue Service, POB 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand delivered Monday through 
Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-
148701-03), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue, NW., Washington, DC, or sent electronically, via the IRS 
Internet site at https://www.irs.gov/regs or via the Federal eRulemaking 
Portal at https://www.regulations.gov (indicate IRS and REG-148701-03).

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Debra A.

[[Page 10573]]

Kohn, (202) 622-7985; concerning submissions of comments or requests 
for a hearing, Guy Traynor, (202) 622-7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

    This document contains proposed amendments to the Procedure and 
Administration Regulations (26 CFR part 301) under section 6502 of the 
Internal Revenue Code (Code). The regulations reflect the amendment of 
the Code by section 3461 of the Internal Revenue Service Restructuring 
and Reform Act of 1998 (RRA 1998) (Public Law 105-206, 112 Stat. 685, 
764).

Collection of Tax Liabilities After Assessment Under Section 6502

    Pursuant to section 6502 of the Code, the IRS generally has 10 
years from the date of assessment to collect a timely assessed tax 
liability. Prior to January 1, 2000, the effective date of section 3461 
of RRA 1998, section 6502 permitted the IRS to enter into agreements 
with the taxpayer to extend the period of limitations on collection at 
any time prior to the expiration of the period provided in section 
6502. Prior to the enactment of RRA 1998, the IRS used these collection 
extension agreements, or waivers, in various circumstances to protect 
its ability to collect a tax liability beyond the original 10-year 
period of limitations on collection. For example, the IRS historically 
conditioned consideration of an offer in compromise upon the execution 
of a collection extension agreement or waiver.
    In addition, the Code contains several provisions that operate to 
toll the period of limitations on collection upon the occurrence of 
certain events. For example, section 6331(k) operates in part to 
suspend the period of limitations on collection for the period of time 
during which an offer in compromise is pending, for 30 days after 
rejection, and while a timely filed appeal is pending. Similarly, 
section 6503(h) operates to suspend the period of limitations on 
collection for the period of time during which the IRS is prohibited 
from collecting a tax due to a bankruptcy proceeding, and for 6 months 
thereafter. These statutory suspension provisions toll the period of 
limitations on collection even if the period of limitations on 
collection previously has been extended pursuant to an executed 
collection extension agreement. See Klingshirn v. United States (In re 
Klingshirn), 147 F.3d 526 (6th Cir. 1998).
    Section 3461 of RRA 1998 amended section 6502 of the Code to limit 
the ability of the IRS to enter into agreements extending the period of 
limitations on collection. Section 3461 of RRA 1998 also included an 
off-Code provision governing the continued effect of collection 
extension agreements executed on or before December 31, 1999.

Explanation of Provisions

    The proposed regulations incorporate the amendments made by section 
3461 of RRA 1998. The proposed regulations provide that the IRS may 
enter into an agreement to extend the period of limitations on 
collection if an extension agreement is executed: (1) At the time an 
installment agreement is entered into; or (2) prior to release of a 
levy pursuant to section 6343, if the release occurs after the 
expiration of the original period of limitations on collection.
    The proposed regulations also incorporate the off-Code provision in 
section 3461(c) of RRA 1998 governing the continued effectiveness of 
extension agreements executed on or before December 31, 1999. The 
proposed regulations provide that if the extension agreement was 
executed in connection with an installment agreement on or before 
December 31, 1999, the extension agreement expires on the 90th day 
after the date agreed upon in the extension agreement. The proposed 
regulations provide that any other extension agreement executed on or 
before December 31, 1999, expires on the later of: (1) December 31, 
2002, or if earlier, the date of which the extension agreement expired 
by its terms; or (2) the end of the original 10-year statutory period.

Special Analysis

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in Executive Order 
12866. Therefore, a regulatory assessment is not required. It also has 
been determined that section 553(b) of the Administrative Procedure Act 
(5 U.S.C. chapter 5) does not apply to these regulations, and because 
these regulations do not impose a collection of information on small 
entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not 
apply. Pursuant to section 7805(f) of the Code, this notice of proposed 
rulemaking will be submitted to the Chief Counsel for Advocacy of the 
Small Business Administration for comment on its impact on small 
business.

Comments and Requests for a Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written comments (a signed original 
and eight (8) copies) or electronically generated comments that are 
submitted timely to the IRS. The IRS and Treasury Department request 
comments on the clarity of the proposed rule and how it may be made 
easier to understand. All comments will be available for public 
inspection and copying.
    A public hearing may be scheduled if requested in writing by a 
person that timely submits written comments. If a public hearing is 
scheduled, notice of the date, time, and place for the hearing will be 
published in the Federal Register.

Drafting Information

    The principal author of these regulations is Aaron D. Gregory of 
the Office of the Associate Chief Counsel (Procedure and 
Administration), Collection, Bankruptcy & Summonses Division.

List of Subjects in 26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 301 is proposed to be amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

    Paragraph 1. The authority citation for part 301 continues to read 
in part as follows:

    Authority: 26 U.S.C. 7805 * * *

    Par. 2. Section 301.6502-1 is revised to read as follows:


Sec.  301.6502-1  Collection after assessment.

    (a) General rule. In any case in which a tax has been assessed 
within the applicable statutory period of limitations on assessment, a 
proceeding in court to collect the tax may be commenced, or a levy to 
collect the tax may be made, within 10 years after the date of 
assessment.
    (b) Agreement to extend the period of limitations on collection. 
The Secretary may enter into an agreement with a taxpayer to extend the 
period of limitations on collection in the following circumstances:
    (1) Extension agreement entered into in connection with an 
installment agreement. If the Secretary and the taxpayer enter into an 
installment agreement for the tax liability prior to the expiration of 
the period of limitations on collection, the Secretary

[[Page 10574]]

and the taxpayer, at the time the installment agreement is entered 
into, may enter into a written agreement to extend the period of 
limitations on collection to a date certain. A written extension 
agreement entered into under this paragraph shall extend the period of 
limitations on collection until the 89th day after the date agreed upon 
in the written agreement.
    (2) Extension agreement entered into in connection with the release 
of a levy under section 6343. If the Secretary has levied on any part 
of the taxpayer's property prior to the expiration of the period of 
limitations on collection and the levy is subsequently released 
pursuant to section 6343 after the expiration of the period of 
limitations on collection, the Secretary and the taxpayer, prior to the 
release of the levy, may enter into a written agreement to extend the 
period of limitations on collection to a date certain. A written 
extension agreement entered into under this paragraph shall extend the 
period of limitations on collection until the date agreed upon in the 
extension agreement.
    (c) Continued effectiveness of agreements to extend the period of 
limitations on collection entered into on or before December 31, 1999--
(1) In general. Except as provided in paragraph (c)(2) of this section, 
if, on or before December 31, 1999, the Secretary and the taxpayer 
entered into a written agreement to extend the period of limitations on 
collection for a tax liability to a date after December 31, 2002, then, 
unless the written agreement expires by its terms prior to December 31, 
2002, the period of limitations on collection expires on the later of--
    (i) The last day of the original 10-year statutory period; or
    (ii) December 31, 2002.
    (2) Written agreements entered into in connection with installment 
agreements. If, on or before December 31, 1999, the Secretary and the 
taxpayer, in connection with an installment agreement, entered into a 
written agreement to extend the period of limitations on collection for 
a tax liability, the written agreement extends the period of 
limitations on collection until the 90th day after the date agreed upon 
in the written agreement.
    (d) Proceeding in court for the collection of the tax. If a 
proceeding in court for the collection of a tax is begun within the 
period provided in paragraph (a) of this section (or within any 
extended period as provided in paragraphs (b) and (c) of this section), 
the period during which the tax may be collected by levy is extended 
until the liability for the tax or a judgment against the taxpayer 
arising from the liability is satisfied or becomes unenforceable.
    (e) Effect of statutory suspensions of the period of limitations on 
collection if executed collection extension agreement is in effect--(1) 
Any statutory suspension of the period of limitations on collection 
tolls the running of the period of limitations on collection, as 
extended pursuant to an executed extension agreement under paragraph 
(b) or (c) of this section, for the amount of time set forth in the 
relevant statute.
    (2) The following example illustrates the principle set forth in 
this paragraph (e):

    Example. In June of 2003, the Internal Revenue Service (IRS) 
enters into an installment agreement with the taxpayer to provide 
for periodic payments of the taxpayer's timely assessed tax 
liabilities. At the time the installment agreement is entered into, 
the taxpayer and the IRS execute a written agreement to extend the 
period of limitations on collection. The extension agreement 
executed in connection with the installment agreement operates to 
extend the period of limitations on collection to the date agreed 
upon in the extension agreement, plus 89 days. Subsequently, and 
prior to the expiration of the extended period of limitations on 
collection, the taxpayer files a bankruptcy petition under chapter 7 
of the Bankruptcy Code and receives a discharge from bankruptcy a 
few months later. Section 6503(h) of the Internal Revenue Code 
operates to suspend the running of the previously extended period of 
limitations on collection for the period of time the IRS is 
prohibited from collecting due to the bankruptcy proceeding, and for 
6 months thereafter. The new expiration date for the IRS to collect 
the tax is the date agreed upon in the previously executed extension 
agreement, plus 89 days, plus the period during which the IRS is 
prohibited from collecting due to the bankruptcy proceeding, plus 6 
months.

    (f) Date when levy is considered made. The date on which a levy on 
property or rights to property is considered made is the date on which 
the notice of seizure required under section 6335(a) is given.
    (g) Effective date. This section is applicable on the date final 
regulations are published in the Federal Register.

Mark E. Matthews,
Deputy Commissioner of Services and Enforcement.
[FR Doc. 05-4280 Filed 3-3-05; 8:45 am]
BILLING CODE 4830-01-P
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