SECTION 7. STATEMENT OF

DISPUTABLE TAX

.01 Interest on a deposit under section 6603(d) will be allowed only to the extent that the deposit is attributable to a disputable tax. The amount and nature of the disputable tax must be identified at the time the amount is remitted to the Service pursuant to section 4 or identified as a deposit under section 6603 pursuant to section 5.

.02 Until further guidance is issued, taxpayers are permitted to use any reasonable method for calculating the amount of disputable tax for purposes of section 6603(d)(2). To the extent that a taxpayer’s calculation of a disputable tax exceeds the amount proposed as a deficiency in a 30-day letter issued to the taxpayer, or the taxpayer desires to remit a deposit prior to receiving a 30-day letter, the taxpayer must provide a written statement to the

against another assessed or unassessed liability. For example, a taxpayer under examination for several different years may request that a deposit made for one type of tax in one year be applied to another type of tax in another year. The request must be in writing and must be directed to the same office where the original deposit was made.

.03 Treatment of an undesignated remit- tance in the full amount of a proposed lia- bility .

If an undesignated remittance is made in the full amount of a proposed liability, such as an amount proposed in a revenue agent’s or examiner’s report, the undesignated remittance will be treated as a payment of tax, a notice of deficiency will not be mailed and the taxpayer will not have the right to petition the Tax Court for a redetermination of the deficiency.

.04 Treatment of remittances that are made during an examination, but prior to the time the Service proposes a liability .

(1) Any undesignated remittance that is made while the taxpayer is under examination, but before a liability is proposed to the taxpayer in writing ( e.g., before the issuance of a revenue agent’s or examiner’s report), will be treated by the Service as a deposit if the taxpayer has no outstanding liabilities. The taxpayer will be notified concerning the status of the remittance as a deposit, and may elect to have the deposit returned prior to the issuance of a revenue agent’s or examiner’s report.

(2) If the taxpayer leaves an undesignated remittance on deposit until completion of the examination, the Service will follow the procedures described in section 4.02. .05 Post statutory notice remittances . (1) An undesignated remittance made after the mailing of a notice of deficiency in complete or partial satisfaction of the deficiency will be considered a payment of tax, will be posted to the taxpayer’s account as soon as possible, and will not deprive the Tax Court of jurisdiction over the deficiency.

(2) A remittance that is made before the decision of the Tax Court is final and specifically designated by the taxpayer in writing as a deposit, is not a substitute for a bond to stay assessment and collection described in section 7485.

(3) If the taxpayer has no other outstanding liabilities, an undesignated remit

tance made by the taxpayer after the date that the Tax Court files its decision in an amount that is greater than the amount of the deficiency determined by the Tax Court, plus any interest that has accrued on that amount at the remittance date, will be treated as a deposit, but only to the extent the amount of the remittance exceeds the amount of the deficiency determined by the Tax Court, plus interest. This excess amount will be treated as a deposit until sufficient information is obtained by the Service to apply the remittance to an outstanding liability or to determine that the amount of the remittance should be returned to the taxpayer. The amount that is less than or equal to the amount of the deficiency plus interest will be applied as a payment.