§1311 — Title 26 Internal Revenue Code | U.S. Code

§1311 Correction of error

Title 26 › Subtitle Subtitle A— - Income Taxes › Chapter CHAPTER 1— - NORMAL TAXES AND SURTAXES › Subchapter Subchapter Q— - Readjustment of Tax Between Years and Special Limitations › Part PART II— - MITIGATION OF EFFECT OF LIMITATIONS AND OTHER PROVISIONS › § 1311

Last updated Apr 6, 2026|Official source

Summary

When the IRS finds an error that is one of the kinds listed in the other rules, but some other law stops fixing the result right away (not counting these rules or the compromise rule), the IRS must fix the effect later by making an adjustment in the amount and way set out in the rules at section 1314. Adjustments are allowed only in certain cases. Except for two special kinds of cases, a refund-style adjustment can be made only if the IRS’s determination adopts the IRS’s position. An adjustment collected like extra tax can be made only if the determination adopts the taxpayer’s position. For the excluded-income case, an adjustment can be made only if the IRS could still assess the tax when it first told the taxpayer in a notice of deficiency or in Tax Court that the item should be included. For disallowed deductions or credits, an adjustment can be made only if the right to a refund was not barred when the taxpayer first put their claim in writing to the IRS or to Tax Court. If the adjustment is collected like extra tax (except for the excluded-income case), it won’t be made for a related taxpayer unless that relatedness existed when the main taxpayer first took the inconsistent position on a return, refund claim, or Tax Court petition, or if there was no such earlier position, at the time of the determination.

Title 26, §1311

Internal Revenue Code — Source: USLM XML via OLRC

(a)If a determination (as defined in section 1313) is described in one or more of the paragraphs of section 1312 and, on the date of the determination, correction of the effect of the error referred to in the applicable paragraph of section 1312 is prevented by the operation of any law or rule of law, other than this part and other than section 7122 (relating to compromises), then the effect of the error shall be corrected by an adjustment made in the amount and in the manner specified in section 1314.

(b)(1)Except in cases described in paragraphs (3) (B) and (4) of section 1312, an adjustment shall be made under this part only if—

(A)in case the amount of the adjustment would be credited or refunded in the same manner as an overpayment under section 1314, there is adopted in the determination a position maintained by the Secretary, or

(B)in case the amount of the adjustment would be assessed and collected in the same manner as a deficiency under section 1314, there is adopted in the determination a position maintained by the taxpayer with respect to whom the determination is made,

(2)(A)In the case of a determination described in section 1312(3)(B) (relating to certain exclusions from income), adjustment shall be made under this part only if assessment of a deficiency for the taxable year in which the item is includible or against the related taxpayer was not barred, by any law or rule of law, at the time the Secretary first maintained, in a notice of deficiency sent pursuant to section 6212 or before the Tax Court, that the item described in section 1312(3)(B) should be included in the gross income of the taxpayer for the taxable year to which the determination relates.

(B)In the case of a determination described in section 1312(4) (relating to disallowance of certain deductions and credits), adjustment shall be made under this part only if credit or refund of the overpayment attributable to the deduction or credit described in such section which should have been allowed to the taxpayer or related taxpayer was not barred, by any law or rule of law, at the time the taxpayer first maintained before the Secretary or before the Tax Court, in writing, that he was entitled to such deduction or credit for the taxable year to which the determination relates.

(3)In case the amount of the adjustment would be assessed and collected in the same manner as a deficiency (except for cases described in section 1312(3)(B)), the adjustment shall not be made with respect to a related taxpayer unless he stands in such relationship to the taxpayer at the time the latter first maintains the inconsistent position in a return, claim for refund, or petition (or amended petition) to the Tax Court for the taxable year with respect to which the determination is made, or if such position is not so maintained, then at the time of the determination.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1976—Subsec. (b)(2). Pub. L. 94–455, §§ 1901(a)(142), 1906(b)(13)(A), struck out “or his delegate” after “Secretary” and “of the United States” after “Tax Court” wherever appearing. Subsec. (b)(3). Pub. L. 94–455, § 1901(a)(142), struck out “of the United States” after “Tax Court”.

Statutory Notes and Related Subsidiaries

Effective Date

of 1976 AmendmentAmendment by section 1901(a)(142) of Pub. L. 94–455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.