Rev. Rul. 56-501

SECTION 1. PURPOSE

The purpose of this Revenue Ruling is to announce the terminal dates of interest periods applicable to deficiencies determined by the Tax Court of the United States.

SEC. 2. BACKGROUND

.01 Where the Tax Court's decision is based on a stipulation between the parties, the agreement to stipulate provides that the restrictions on assessment and collection of the agreed deficiency are waived effective as of the date of entry of the court's decision. The effect, therefore, for interest purposes, is the same as if the taxpayer had filed Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency. The Internal Revenue Service may, upon entry of the court's decision, immediately assess the deficiency with accrued interest and issue a notice and demand for payment.

.02 In nonstipulated cases, the date of the court's decision has no effect upon the statutory interest terminal dates, although it is a factor in determining the period during which the restrictions against assessment and collection remain in force.

SEC. 3. TERMINAL DATES APPLICABLE

.01 If a stipulated deficiency in tax is imposed under the Internal Revenue Code of 1939, the terminal date of the interest period is the thirtieth day after the date of entry of the court's decision or the date of assessment, whichever is the earlier. Section 292 of the Code. If payment is not made within ten days from the date of notice and demand, further interest accrues on the tax and interest from the date of notice and demand to the date of payment. See section 294(b).

.02 If a stipulated deficiency is imposed under the 1954 Code, the terminal date of the interest period is:

1 The date of notice and demand, if notice and demand is issued within thirty days after the date of entry and payment is made within ten days from the date of notice and demand therefor; or

2 The date of payment, if notice and demand is issued within thirty days from date of entry and payment is not made within ten days from the date of notice and demand therefor; or

3 The date of payment, if notice and demand is not made within 30 days after the date of entry, except that no interest is imposed for the portion of the period beginning immediately after the thirtieth day following the date of entry and ending with the date of notice and demand, or for the period after the date of notice and demand if the amount is paid within ten days after the date of such notice and demand.

.03 If a nonstipulated deficiency in tax is imposed under the 1939 Code, the terminal date of the interest period is the date of assessment. Section 292 of the 1939 Code. If payment is not made within ten days from the date of notice and demand, further interest accrues on the tax and interest from the date of notice and demand to the date of payment. See section 294(b) of the 1939 Code.

.04 If a nonstipulated deficiency in tax is imposed under the 1954 Code, the terminal date of the interest period is:

1 The date of notice and demand, if payment is made within ten days from the date of such notice and demand; or

2 The date of payment, if payment is not made within ten days from the date of notice and demand therefor.