§6425 — Title 26 Internal Revenue Code | U.S. Code

Summary

A corporation can ask the IRS to adjust an overpayment of its estimated income tax after the tax year ends, but it must do so before it files its return and no later than the 15th day of the fourth month after the year ends. The request must be signed and filed the way section 6065 and IRS rules require, and it must say how much estimated tax was paid, what the corporation now thinks its tax will be, the amount of the requested adjustment, and any other information the IRS asks for. The IRS has 45 days to do a quick check for mistakes and to decide the adjustment. The IRS can deny an application if it has big errors that can’t be fixed in 45 days. Within 45 days the IRS may apply the adjustment to other tax owed and must refund any remainder. The adjustment is allowed only if it is at least 10 percent of the corporation’s estimated tax liability and at least $500. Except for rules in section 6655, the adjustment counts as a reduction in estimated tax on the day the credit is made or the refund is paid. Income tax liability here means the corporation’s total tax under the listed tax sections minus the listed credits. The adjustment amount equals what was paid minus the corporation’s estimated liability at the time of filing the request. If taxes were paid or will be filed on a consolidated basis, the IRS may set special rules.

Title 26, §6425

Internal Revenue Code — Source: USLM XML via OLRC

(a)(1)A corporation may, after the close of the taxable year and on or before the 15th day of the fourth month thereafter, and before the day on which it files a return for such taxable year, file an application for an adjustment of an overpayment by it of estimated income tax for such taxable year. An application under this subsection shall not constitute a claim for credit or refund.

(2)An application under this subsection shall be verified in the manner prescribed by section 6065 in the case of a return of the taxpayer, and shall be filed in the manner and form required by regulations prescribed by the Secretary. The application shall set forth—

(A)the estimated income tax paid by the corporation during the taxable year,

(B)the amount which, at the time of filing the application, the corporation estimates as its income tax liability for the taxable year,

(C)the amount of the adjustment, and

(D)such other information for purposes of carrying out the provisions of this section as may be required by such regulations.

(b)(1)Within a period of 45 days from the date on which an application for an adjustment is filed under subsection (a), the Secretary shall make, to the extent he deems practicable in such period, a limited examination of the application to discover omissions and errors therein, and shall determine the amount of the adjustment upon the basis of the application and the examination; except that the Secretary may disallow, without further action, any application which he finds contains material omissions or errors which he deems cannot be corrected within such 45 days.

(2)The Secretary, within the 45-day period referred to in paragraph (1), may credit the amount of the adjustment against any liability in respect of an internal revenue tax on the part of the corporation and shall refund the remainder to the corporation.

(3)No application under this section shall be allowed unless the amount of the adjustment equals or exceeds (A) 10 percent of the amount estimated by the corporation on its application as its income tax liability for the taxable year, and (B) $500.

(4)For purposes of this title (other than section 6655), any adjustment under this section shall be treated as a reduction, in the estimated income tax paid, made on the day the credit is allowed or the refund is paid.

(c)For purposes of this section and section 6655(h) (relating to excessive adjustment)—

(1)The term “income tax liability” means the excess of—

(A)the sum of—

(i)the tax imposed by section 11 or subchapter L of chapter 1, whichever is applicable, plus

(ii)the tax imposed by section 55, plus

(iii)the tax imposed by section 59A, over

(B)the credits against tax provided by part IV of subchapter A of chapter 1.

(2)The amount of an adjustment under this section is equal to the excess of—

(A)the estimated income tax paid by the corporation during the taxable year, over

(B)the amount which, at the time of filing the application, the corporation estimates as its income tax liability for the taxable year.

(d)If the corporation seeking an adjustment under this section paid its estimated income tax on a consolidated basis or expects to make a consolidated return for the taxable year, this section shall apply only to such extent and subject to such conditions, limitations, and exceptions as the Secretary may by regulations prescribe.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2022—Subsec. (c)(1)(A). Pub. L. 117–169 amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: ��(A) the sum of— “(i) the tax imposed by section 11, or subchapter L of chapter 1, whichever is applicable, plus “(ii) the tax imposed by section 59A, over”. 2018—Subsec. (c)(1)(A). Pub. L. 115–141, which directed amendment of subpar. (A) by substituting “the sum” for “The sum”, could not be executed because “The sum” no longer appeared after the

Amendments

made by Pub. L. 115–97. See 2017 Amendment notes below. 2017—Subsec. (c)(1)(A). Pub. L. 115–97, § 14401(d)(3), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the tax imposed by section 11 or subchapter L of chapter 1, whichever is applicable, over”. Pub. L. 115–97, § 13001(b)(2)(P), struck out “or 1201(a),” after “by section 11”. Pub. L. 115–97, § 12001(b)(17), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “The sum of— “(i) the tax imposed by section 11 or 1201(a), or subchapter L of chapter 1, whichever is applicable, plus “(ii) the tax imposed by section 55, over”. 2015—Subsec. (a)(1). Pub. L. 114–41 substituted “fourth month” for “third month”. 2014—Subsec. (c)(1)(A). Pub. L. 113–295 inserted “plus” at end of cl. (i), substituted “over” for “plus” at end of cl. (ii), and struck out cl. (iii) which read as follows: “the tax imposed by section 59A, over”. 1987—Subsec. (c). Pub. L. 100–203 substituted “section 6655(h)” for “section 6655(g)”. 1986—Subsec. (c)(1)(A). Pub. L. 99–514 amended subpar. (A) generally, restating existing provisions as cl. (i) and adding cl. (ii). Pub. L. 99–499 amended subsec. (c)(1)(A), as amended by the Tax Reform Act of 1986 (Pub. L. 99–514), by striking out “plus” at end of cl. (i), substituting “plus” for “over” at end of cl. (ii), and adding cl. (iii). 1976—Subsecs. (a), (b), (d). Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.

Statutory Notes and Related Subsidiaries

Effective Date

of 2022 AmendmentAmendment by Pub. L. 117–169 applicable to taxable years beginning after Dec. 31, 2022, see section 10101(f) of Pub. L. 117–169, set out as a note under section 11 of this title.

Effective Date

of 2017 AmendmentAmendment by section 12001(b)(17) of Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 12001(c) of Pub. L. 115–97, set out as a note under section 11 of this title. Amendment by section 13001(b)(2)(P) of Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 13001(c)(1) of Pub. L. 115–97, set out as a note under section 11 of this title. Amendment by section 14401(d)(3) of Pub. L. 115–97 applicable to base erosion payments (as defined in section 59A(d) of this title) paid or accrued in taxable years beginning after Dec. 31, 2017, see section 14401(e) of Pub. L. 115–97, set out as a note under section 26 of this title.

Effective Date

of 2015 AmendmentAmendment by Pub. L. 114–41 applicable to returns for taxable years beginning after Dec. 31, 2015, with special rule for certain C corporations, see section 2006(a)(3) of Pub. L. 114–41, set out as a note under section 170 of this title.

Effective Date

of 2014 AmendmentAmendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a

Savings Provision

, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title.

Effective Date

of 1987 AmendmentAmendment by Pub. L. 100–203 applicable to taxable years beginning after Dec. 31, 1987, see section 10301(c) of Pub. L. 100–203, set out as a note under section 585 of this title.

Effective Date

of 1986

Amendments

Amendment by Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, with certain exceptions and qualifications, see section 701(f) of Pub. L. 99–514, set out as an

Effective Date

note under section 55 of this title. Amendment by Pub. L. 99–499 applicable to taxable years beginning after Dec. 31, 1986, see section 516(c) of Pub. L. 99–499, set out as a note under section 26 of this title.

Effective Date

Section applicable with respect to taxable years beginning after Dec. 31, 1967, except as provided by section 104 of Pub. L. 90–364, set out as notes under section 6154 and 51 of this title, see section 103(f) of Pub. L. 90–364, set out as an

Effective Date

of 1968 Amendment note under section 6154 of this title. Applicability of Certain

Amendments

by Pub. L. 99–514 in Relation to Treaty Obligations of United StatesFor applicability of amendment by Pub. L. 99–514 notwithstanding any treaty obligation of the United States in effect on Oct. 22, 1986, see section 1012(aa)(2) of Pub. L. 100–647, set out as a note under section 861 of this title.

§6425 Adjustment of overpayment of estimated income tax by corporation

Summary

Title 26, §6425

Notes & Related Subsidiaries

Editorial Notes

Amendments

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Effective Date

Effective Date

Savings Provision

Effective Date

Effective Date

Amendments

Effective Date

Effective Date

Effective Date

Amendments

Citations & Metadata