Rev. Proc. 83-58

SECTION 1. PURPOSE

The purpose of this revenue procedure is to modify section 3.02(4)b.(b) of Rev. Proc. 60-17, 1960-2 C.B. 942.

SEC. 2. BACKGROUND

.01 Rev. Proc. 60-17, 1960-2 C.B. 942, outlines the provisions of the Internal Revenue Code relating to restricted interest on internal revenue taxes and sets forth the procedure to be followed in the computation of restricted interest.

.02 Section 3.02(4)b.(b) of Rev. Proc. 60-17 provides that if an overpayment is applied as a credit against unpaid interest due for the same year and type of tax, no interest is allowable. This section reasoned that unpaid interest, penalties or additions to the tax are considered to be a part of the liability and that no overpayment exists until all liability is satisfied.

.03 Section 6611(b) of the Internal Revenue Code provides that when an overpayment is credited rather than refunded, interest must be allowed and paid from the date of overpayment to the due date of the amount against which the credit is taken. Section 301.6611-1(h)(2)(v) of the regulations on Procedure and Administration provides that in the case of a credit against assessed interest the due date is the date of assessment of the interest.

SEC. 3. EFFECT ON OTHER REVENUE PROCEDURES

Section 3.02(4)b.(b) of Rev. Proc. 60-17 is modified to provide that if an overpayment is applied as a credit to unpaid interest, penalty or addition to tax for the same year and type of tax, interest is allowed from the date of overpayment to the date of assessment of the amount to which the credit is applied. See Rev. Rul. 83-113, page 251, this Bulletin.

SEC. 4. EFFECTIVE DATE

The modification of section 3.02 (4)b.(b) is effective August 1, 1983, the date of publication of this revenue procedure in the Internal Revenue Bulletin.