§6861 Jeopardy Assessments of Income, Estate, Gift, and Certain Excise Taxes

Summary

If the IRS believes it will lose the chance to collect a tax, it can immediately assess the tax amount and demand payment. That immediate assessment includes any interest or extra charges. If the IRS makes this emergency assessment before it has mailed the regular notice, it must send that notice within 60 days. The IRS can assess a different amount than any earlier notice and can do this even if the taxpayer has already filed a case in Tax Court. Before the Tax Court decides, the IRS can reduce or cancel the emergency assessment. The IRS must tell the Tax Court about the assessment or any change, and the Tax Court can review and decide the full amount. If the emergency assessment is made after the Tax Court issues a decision, it can only cover the amount the Tax Court decided. The IRS may not make an emergency assessment after the Tax Court decision is final or after a taxpayer files for review. If a final Tax Court decision fixes the correct amount and collection was stayed by a bond, the unpaid part must be collected and any extra payments refunded automatically. If the final amount is larger than what was assessed, the IRS will assess and collect the difference. If the IRS finds there was no real danger to collection, it can cancel the emergency assessment, but not after the Court’s decision or after the filing deadline. Time limits for later assessments or collections are treated as if the emergency assessment never happened, except the clock is paused from the date of the emergency assessment until 10 days after it is canceled.