SECTION 4. IDENTIFYING PERIODS

FOR WHICH THE NET RATE OF ZERO APPLIES

.01 In general . The Service will take reasonable steps to identify overlapping periods of tax overpayments and underpayments and apply the net interest rate of zero in § 6621(d) to interest accruing on or after October 1,1998. In such instances, the Service will provide a copy of the interest computation to the taxpayer. However, because the Service is currently unable to automatically apply the net interest rate of zero in § 6621(d), there may be instances when the Service fails to identify periods of overlap and apply the net interest rate of zero. To ensure that taxpayers receive the benefit of the net interest rate of zero in all applicable situations, taxpayers should request the net interest rate of zero (or request the Service to recompute the net interest rate of zero if the taxpayer disagrees with a Service computation of the net interest rate of zero) on or before the date on which the last applicable period of limitation (as described in section 4.02 of this revenue procedure) closes and according to the procedures in section 5 of this revenue procedure. Requests will be required until such time as the Service can automatically apply the net interest rate of zero.

.02 Applicable periods of limitation . The applicable periods of limitation are as follows:

(1) Underpayment interest . A claim for credit or refund of interest paid on an underpayment pursuant to § 6601 or 6602 generally must be filed within 3 years from the time the tax return was filed or 2 years from the time the interest was paid, whichever period expires later, pursuant to § 6511.

(2) Overpayment interest . A claim for payment of additional interest allowable on an overpayment pursuant to § 6611 must be filed within the 6-year period in which a suit must be filed pursuant to 28 U.S.C. §§ 2401 and 2501. See Rev. Rul. 56–506, 1956–2 C.B. 959. A taxpayer’s request for application of the net interest rate of zero under the procedures described in section 5 of this revenue procedure does not protect the taxpayer’s rights with respect to suits against the government pursuant to 28 U.S.C. §§ 2401 and 2501. The only manner in which a taxpayer can fully protect its rights to additional overpayment interest is by filing a civil suit against the United States prior to the termination of the 6–year statutory period set forth in 28 U.S.C. §§ 2401 and 2501. See Rev. Rul. 57–242, 1957–1 C.B. 452. .03 Net Rate of Zero . In general, the Service will apply the net rate of zero as follows:

zero by increasing overpayment interest owed to the taxpayer.