Rev. Proc. 56-27

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to set forth the differences appearing in the provisions of law, as contained in the Internal Revenue Codes of 1939 and 1954, relative to the statutory periods of limitation applicable to the assertion of deficiencies in tax attributable to erroneous carryback allowances.

SEC. 2. BACKGROUND.

.01 Section 276(d) of the Internal Revenue Code of 1939 provides that where a taxpayer has received a refund under section 3780 of the 1939 Code due to the application of a carry back and it is later determined that the allowance of the carryback was erroneous, the assessment of the deficiency may be made under the limitation period applicable to the year which produced the net loss or excess profits credit carryback.

.02 The 1954 Code contains no special provisions similar to those in section 276(d) of the 1939 Code.

.03 Section 7851(a)(6)(A) of the 1954 Code provides that the general rule, as to the application of the revenue laws, is that the provisions of subtitle F of the 1954 Code, which includes in part the subchapter `Limitation on Assessment and Collection,' shall take effect on the day after the date of enactment of the 1954 Code and shall be applicable with respect to any tax imposed by the 1954 Code. The date of enactment of the 1954 Code is August 16, 1954.

SEC. 3. APPLICABLE STATUTES OF LIMITATION.

.01 In cases wherein the returns for both years involved in the erroneous carryback allowance were filed under the provisions of the 1939 Code, any deficiency attributable to such an allowance may be assessed within the statutory period of limitations applicable to the year of the origin of the carryback, as provided under section 276(d) of the 1939 Code.

.02 Where a carryback, originating in a taxable year for which a return was filed under the 1954 Code, results in an erroneous carryback allowance in a taxable year for which a return was filed under the 1939 Code, any deficiency attributable to such erroneous allowance, also, may be assessed within the statutory period of limitations applicable to the year of the origin of the carryback, under the provisions of section 276(d) of the 1939 Code.

.03 In cases wherein the returns for both years involved in an erroneous carryback allowance were filed under the provisions of the 1954 Code, any deficiency attributable to such erroneous allowance must be assessed under the provisions of the 1954 Code and within the statutory period of limitations of such Code applicable to the year in which the erroneous allowance was made.