|By PR Newswire||
|January 18, 2013 06:09 PM EST||
DALLAS, Jan. 18, 2013 /PRNewswire/ -- Ford submitted remittances to the Internal Revenue Service (IRS), pursuant to Revenue Procedure 84-58, 1984-2 C.B. 501, superseded by Revenue Procedure 2005-18, 2005-1 C.B. 798, to stop the accrual of underpayment interest related to 30-day letters it received from the IRS. Ford designated these remittances as deposits in the nature of a cash bond, but subsequently, Ford requested that the IRS treat the remittances as advance payments. The IRS complied with the request. Eventually, the IRS determined that Ford overpaid its taxes. The resultant refunds included interest under section 6611 computed from the dates when the deposits were converted to advance payments and not from when Ford originally made the deposits.
Ford sued for approximately $445 million in overpayment interest computed from the original deposit dates. The Sixth Circuit agreed with the government that interest under section 6611 accrued only from the later dates when the deposits were converted to payments.
Section 6611 does not define "the date of overpayment." The government argued that there can be no "overpayment" under section 6611, unless there has been a "payment," and there was no payment until Ford requested that its deposits be converted into payments. Prior to the conversion date, the remittances were treated as deposits, and Ford could have requested that the funds be returned at any time. Ford argued that section 6611 and section 6601 should be interpreted symmetrically. Section 6601 stops the accrual of underpayment interest on the date the tax is "paid," and section 6611 starts the accrual of overpayment interest on the "date of the overpayment." Because its deposits stopped the accrual of interest under section 6601 from the deposit dates, Ford argued that those deposit dates should also be considered the payment dates for purposes of determining the date of overpayment under section 6611.
Ford also argued that section 5.05 of Revenue Procedure 84-58 supported its position. The first sentence of section 5.05 provides that "[r]emittances treated as payments of tax will be treated as any other assessed amount and compound interest will be paid on any overpayment under section 6611 of the Code...." Ford argued that this sentence is a general rule, allowing overpayment interest on remittances that are treated as payments of tax, regardless of whether the remittances were originally treated as payments or were later converted to payments. The government argued that Revenue Procedure 84-58 does not even contemplate requests to convert a deposit to a tax payment. In the government's view, a conversion of a deposit to a payment is effectively a return of this deposit, which does not accrue overpayment interest, followed by an "immediate resubmission" of the amount as an actual tax payment, which does accrue overpayment interest from the date it is treated as being resubmitted. The court found the government's "constructive return" interpretation to be "strained" because if it were correct, the taxpayer should also lose the benefit of stopping the accrual of underpayment interest for the period up to the conversion date. However, the government did not argue that Ford should lose the benefit of the deposit, stopping the accrual of underpayment interest.
The court found Ford's and the government's interpretation of the meaning of the phrase "the date of overpayment" in section 6611 to be "conflicting, plausible readings of section 6611." The court also found Ford's interpretation of section 5.05 to be "superior" to that of the government. However, because of the ambiguity, the court held that it could not conclude that Congress has "unequivocally expressed" its waiver of sovereign immunity, allowing Ford to receive overpayment interest.
Although the Sixth Circuit's opinion in Ford's case was unfavorable, there is language in the opinion that provides support for favorable taxpayer results on other remittance issues. For example, the court noted that the fact that a taxpayer can initially request that a remittance be treated as a deposit or a tax payment supports the logical inference that a taxpayer may request conversion from a deposit to tax payment. The IRS, in some recent situations, has refused to allow taxpayers to re-designate remittances.
The court also noted that the government's "constructive return" theory was a flawed interpretation ofRevenue Procedure 84-58, but that the theory made some sense in connection with section 6603, which allows interest on returned deposits at a reduced rate (section 6603 interest). Ford made an argument that because section 6603 allows a taxpayer who requests the return of a deposit to obtain section 6603 interest computed from the date of remittance date, it didn't make sense to interpret section 6611 to allow a taxpayer who converts a deposit to recover interest only from the conversion date. The government responded that the conversion of a deposit involves two separate transactions. First, the deposit is constructively returned, and then it is immediately re-submitted as a payment. The court noted that under this reasoning, section 6603 would allow interest to be paid at two different rates—the lower section 6603 rate from the date of deposit to the date of conversion and at the normal interest rate from the date of conversion to the date of refund.
Ryan is an award-winning global tax services firm, with the largest indirect tax practice in North America and the sixth largest corporate tax practice in the United States. Headquartered in Dallas, Texas, the Firm provides a comprehensive range of state, local, federal, and international tax advisory and consulting services on a multi-jurisdictional basis, including audit defense, tax recovery, credits and incentives, tax process improvement and automation, tax appeals, tax compliance, and strategic planning. Ryan is a two-time recipient of the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the dynamic myRyan work environment, which is widely recognized as the most innovative in the tax services industry, Ryan's multi-disciplinary team of more than 1,600 professionals and associates serves over 6,500 clients in 40 countries, including many of the world's most prominent Global 5000 companies. More information about Ryan can be found at www.ryan.com.
TECHNICAL INFORMATION CONTACT:
SYS-CON Events announced today that Linux Academy, the foremost online Linux and cloud training platform and community, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Linux Academy was founded on the belief that providing high-quality, in-depth training should be available at an affordable price. Industry leaders in quality training, provided services, and student certification passes, its goal is to c...
Mar. 28, 2017 03:45 PM EDT Reads: 4,081
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
Mar. 28, 2017 03:45 PM EDT Reads: 3,063
In his session at Cloud Expo, Alan Winters, an entertainment executive/TV producer turned serial entrepreneur, will present a success story of an entrepreneur who has both suffered through and benefited from offshore development across multiple businesses: The smart choice, or how to select the right offshore development partner Warning signs, or how to minimize chances of making the wrong choice Collaboration, or how to establish the most effective work processes Budget control, or how to m...
Mar. 28, 2017 03:45 PM EDT Reads: 294
Deep learning has been very successful in social sciences and specially areas where there is a lot of data. Trading is another field that can be viewed as social science with a lot of data. With the advent of Deep Learning and Big Data technologies for efficient computation, we are finally able to use the same methods in investment management as we would in face recognition or in making chat-bots. In his session at 20th Cloud Expo, Gaurav Chakravorty, co-founder and Head of Strategy Development ...
Mar. 28, 2017 03:45 PM EDT Reads: 3,752
"delaPlex is a software development company. We do team-based outsourcing development," explained Mark Rivers, COO and Co-founder of delaPlex Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Mar. 28, 2017 03:00 PM EDT Reads: 9,577
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
Mar. 28, 2017 03:00 PM EDT Reads: 2,075
SYS-CON Events announced today that Technologic Systems Inc., an embedded systems solutions company, will exhibit at SYS-CON's @ThingsExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Technologic Systems is an embedded systems company with headquarters in Fountain Hills, Arizona. They have been in business for 32 years, helping more than 8,000 OEM customers and building over a hundred COTS products that have never been discontinued. Technologic Systems’ pr...
Mar. 28, 2017 02:15 PM EDT Reads: 3,629
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
Mar. 28, 2017 02:15 PM EDT Reads: 2,162
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
Mar. 28, 2017 02:00 PM EDT Reads: 14,235
SYS-CON Events announced today that Auditwerx will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Auditwerx specializes in SOC 1, SOC 2, and SOC 3 attestation services throughout the U.S. and Canada. As a division of Carr, Riggs & Ingram (CRI), one of the top 20 largest CPA firms nationally, you can expect the resources, skills, and experience of a much larger firm combined with the accessibility and atten...
Mar. 28, 2017 01:31 PM EDT Reads: 197
What if you could build a web application that could support true web-scale traffic without having to ever provision or manage a single server? Sounds magical, and it is! In his session at 20th Cloud Expo, Chris Munns, Senior Developer Advocate for Serverless Applications at Amazon Web Services, will show how to build a serverless website that scales automatically using services like AWS Lambda, Amazon API Gateway, and Amazon S3. We will review several frameworks that can help you build serverle...
Mar. 28, 2017 01:15 PM EDT Reads: 2,182
SYS-CON Events announced today that Loom Systems will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2015, Loom Systems delivers an advanced AI solution to predict and prevent problems in the digital business. Loom stands alone in the industry as an AI analysis platform requiring no prior math knowledge from operators, leveraging the existing staff to succeed in the digital era. With offices in S...
Mar. 28, 2017 01:15 PM EDT Reads: 1,602
SYS-CON Events announced today that HTBase will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. HTBase (Gartner 2016 Cool Vendor) delivers a Composable IT infrastructure solution architected for agility and increased efficiency. It turns compute, storage, and fabric into fluid pools of resources that are easily composed and re-composed to meet each application’s needs. With HTBase, companies can quickly prov...
Mar. 28, 2017 12:45 PM EDT Reads: 3,119
SYS-CON Events announced today that Cloud Academy will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloud Academy is the industry’s most innovative, vendor-neutral cloud technology training platform. Cloud Academy provides continuous learning solutions for individuals and enterprise teams for Amazon Web Services, Microsoft Azure, Google Cloud Platform, and the most popular cloud computing technologies. Ge...
Mar. 28, 2017 11:30 AM EDT Reads: 4,678
SYS-CON Events announced today that T-Mobile will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on ...
Mar. 28, 2017 11:30 AM EDT Reads: 2,471