CSED Calculation


#1

My client’s Canopy Transcript Report shows the following info for TY 2005:

Return Filed: 11-20-06 Amount: $585,544 Est. CSED: 07-20-18
Add. Tx. Assesed: 05-20-07 Amount: $22,374 Est. CSED: 01-18-19
Add. Tx. Assesed: 08-11-08 Amount: $0 Est. CSED: 04-09-20
Add. Tx. Assesed: 04-29-13 Amount: $0 Est. CSED: 12-26-24

I’m confused as to what the actual CSED would be. Any comments please?


#2

Hey Diego,
That is a great question you posted. It appears your client filed a return on 11/20/2006. There was then an additional assessment (Possibly automated underreporter or an actual audit) on 5/20/2007. Each of those actions will have their own CSED, based upon IRM 5.1.19.1.1-”Each tax assessment has a CSED. Internal Revenue Code section 6502 provides that the length of the period for collection after assessment of a tax liability is 10 years. The collection statute expiration ends the government’s right to pursue collection of a liability.”

The subsequent tax assessments are associated with an IRS internal transaction code of TC 290. The sad thing is, the 290 could represent a number of different actions (the generation of a “freeze” code that will keep any refunds from being issued, penalty abatement request that was rejected, and a host of different other reasons). The general public will be unable to know what the root cause of the TC290 is, as the IRS uses reason and source codes that are privileged.

With that being said, you and your client should focus on the two primary assessments that expire in 2018 and 2019.

Hope that helps,
Jeff


#3

Hi Jeff,

Sorry that it took me so much time to thank you for the input. I guess what I’m trying to determine is which portion of the tax liability (which nowadays is only about $85K) expires when, as the Canopy CSED calculations don’t make too much sense to me. Sorry to bother, but is there a way where I can send you 3 pages of account transcript (no sensitive info, of course) for you to help me decipher?


#4

I have a follow up question on this: Does the CSED start when the return is received at IRS? Or when it is processed?

I was looking at a transcript today where the process date is a few months after the received dated.

Thank you!

Gary


#5

The CSED calculation commences on the assessment date (you may see a code “150” on the transcript). There are many cases in which a return is filed and not “assessed” for many months. It just depends on available resources.


#6

Thank you, Jeff. That explains it!