§1314 Amount and Method of Adjustment

Summary

First, find the tax amount that was already figured for the year with the mistake. To do that, add the tax the taxpayer showed on their return (if any) and any amounts already assessed or collected as a deficiency, then subtract any rebates. The adjustment is then handled the same way as if the Secretary had just found a deficiency or an overpayment for that year — it can be assessed and collected, or refunded or credited. Treat the timing as if one year still remained before the normal time limits to assess tax or to file a refund claim. If a later change cancels or changes that earlier determination, the adjustment is redone and any extra refund or tax is corrected. No interest is charged or paid for time before the end of the year when a net operating loss or net capital loss first happens if the adjustment comes from carrying that loss back. The adjustment cannot be reduced by any credit or offset based on items other than the one being fixed. If the adjustment is paid, it cannot be recovered by a refund claim or lawsuit based on different items. This part does not apply to taxes under subtitle C (section 3101 and following) that relate to employment taxes.