SECTION 2. BACKGROUND

.01 During the administration of a bankruptcy estate, the trustee is required to file tax returns for the estate and pay the tax shown thereon. Under section 505(b)(2) of Title 11 of the United States Code (hereinafter referred to as the ‘Bankruptcy Code’), the trustee may request a determination of any unpaid liability of the estate for any tax incurred during the administration of the case, by submitting a tax return for the tax and a request for prompt determination to the Service as prescribed by section 3 of this revenue procedure.

.02 For cases commenced under the Bankruptcy Code on or after October 17, 2005, the effective date of the Bankruptcy Abuse Protection and Consumer Protection Act of 2005, unless the return is fraudulent or contains a material misrepresentation, the estate, the trustee, the debtor, and any successor to the debtor, will be discharged from any liability for

the tax shown on a return submitted in accordance with section 2.01 of this revenue procedure upon:

(1) payment of the tax shown on the return unless (a) the Service notifies the trustee, within 60 days after the request, that the return has been selected for examination, and (b) the Service completes the examination and notifies the trustee of any tax due, within 180 days (or any additional time as permitted by the bankruptcy court) after the request;

(2) payment of the tax as finally determined by the bankruptcy court; or

(3) payment of the tax as finally determined by the Service.

For cases commenced under the Bankruptcy Code before October 17, 2005, the same discharge rules apply, except that section 505(b) of the Bankruptcy Code does not discharge the bankruptcy estate from liability.

May 30, 2006 943 2006–22 I.R.B.

trustee is being selected for examination or is being accepted as filed does not begin to run until a complete request package is received by the Service.

.07 If an incomplete request is received by the Service, the 60-day period for notifying the trustee whether the return filed by the trustee is being selected for examination or is being accepted as filed does not begin to run until a complete request is received by the Field Insolvency office specified by the Service in its correspondence returning the incomplete request.