Rescinding a SNOD

Reviewers can rescind a SNOD mailed to a taxpayer, but only with the consent of the taxpayer. See Delegation Order 4-8; see IRM 1.2.2.5.8.

The taxpayer or the IRS may initiate rescission of a SNOD.

Whether or not a notice is rescinded is at the Secretary's discretion.

The decision to rescind a SNOD is made o a case-by-case basis. A rescission may be agreed if: A SNOD has been issued for an incorrect amount. We must advise the taxpayer that, once rescinded, we may issue another SNOD for a different amount. The SNOD was issued to the wrong taxpayer. The SNOD was issued for the wrong tax period. The taxpayer submits information establishing the actual tax due is less than the amount shown in the SNOD. Other extenuating circumstances warrant recision.

IRS won't enter into a recision in any of these situations:

I. On the date of the recission, 90 days or less remains before the expiration date of the period of limitations on assessment.

II. The 90-day period under IRC 6213(a) has expired without the taxpayer filing a petition with the Tax Court.

III. The taxpayer has filed a petition with the Tax Court.

IV. The taxpayer and the IRS executed a Form 872-A covering any of the tax years in the notice of deficiency, before the notice of deficiency was issued. However, a notice of deficiency may be rescinded in this situation if before rescinding the notice of deficiency the taxpayer and the IRS execute a new Form 872-A covering the same tax years as the earlier Form 872-A.

Since the recission agreement returns the case back to its original statute before the SNOD was issued, carefully consider the statute before you enter into a SNOD recission.

The rescinded SNOD suspends the running of the statute of limitations only for the period during which the SNOD is outstanding. Mandatory Review must determine a new statute date if they issue another SNOD to make assessments.

I there are at least 90 days remaining on the statute, a recission may be entered into. If less than 90 days remains on the statute, the SNOD will be rescinded only if the taxpayer executes a Form 872 or Form 872-A to extend the statute.

I there was a Form 872 or 872-A on the case before the SNOD was issued, the rescission won't be granted unless the taxpayer signs another Form 872 or 872-A before the recission.

Use Form 8626 to get an agreement between the taxpayer and the government to rescind a SNOD.

The originator of the SNOD prepares, controls and executes the form.

The recission agreement: Must apply to the same tax periods as the SNOD. Can list more than one year. Must contain all taxable years covered in the SNOD, Enter all tax years covered below the first paragraph under Tax Year Ended.

The recission agreement must show the same deficiency and penalties as the SNOD.

If the SNOD was issued to both a husband and wife, both spouses or authorized representative(s) for the parties must sign the rescission agreement.

Prepare Form 826 in duplicate. Once executed: Attached one copy of the form to the front of the SNOD. Send the second copy to the taxpayer.

The recission agreement is effective on the date the Commissioner or delegate countersigns the Form 8626.

Use Letter 2264 (DO) to request the taxpayer's concurrence to rescind by signing Form 8626.

Use Letter 2262 (DO) to send a copy of the executed rescission agreement to the taxpayer.

Use Letter 2263 (DO) to advise the taxpayer that the recission is not being granted and the SNOD will remain in effect.