Rev. Proc. 81-17

SECTION 1. PURPOSE

The purpose of this revenue procedure is to inform the trustee (or debtor in possession) representing the bankruptcy estate of the debtor of the procedure to be followed in obtaining a prompt determination by the Service of any unpaid tax liability of the estate incurred during the administration of the case.

This revenue procedure is applicable to all cases commenced under the Bankruptcy Reform Act of 1978, Pub. L. 95-598 (hereinafter referred to as the "Bankruptcy Code") after September 30, 1979, with the exception of chapter 9 municipal debt adjustment cases.

For similar procedures regarding bankruptcy proceedings commenced under the Bankruptcy Act prior to October 1, 1979, see Rev. Proc. 76-23, 1976-1 C.B. 562. SEC. 2. BACKGROUND

.01 During the administration of a bankruptcy estate, the trustee is required to file tax returns for the estate. Under section 505(b) of the Bankruptcy Code, the trustee may request a determination of any unpaid liability of the estate for any tax incurred during the administration of the case, by submitting a tax return for the tax and a request for the determination to the Service.

.02 Unless the return is fraudulent or contains a material misrepresentation, the trustee, the debtor, and any successor to the debtor, will be discharged from any liability for the tax upon:

1 payment of the tax shown on the return if (a) the Service does not notify the trustee, within 60 days after the request, that the return has been selected for examination, or (b) Service does not complete the examination and notify the trustee of any tax due, within 180 days (or any additional time as permitted by the bankruptcy court) after the request;

2 payment of the tax as determined by the bankruptcy court; or

3 payment of the tax as determined by the Service.

SEC. 3. APPLICATION

.01 In the event the trustee wishes to request a prompt determination of any unpaid tax liability of the estate, a written application, in duplicate, under penalties of perjury, requesting a prompt determination must be filed with the District Director for the district in which the bankruptcy case is pending (marked for the "Personal Attention of the Special Procedures Function. DO NOT OPEN IN MAILROOM"). An exact copy of the return (or returns) for a completed taxable period filed by the trustee with the Service, and a statement of the name and location of the office where the return was filed, shall be submitted with the application.

.02 Within 60 days from receipt of the application, the Examination Function will notify the trustee whether the return filed by the trustee is being selected for examination or is being accepted as filed.

.03 If the return is selected for examination, it will be examined on an expedite basis. The Examination Function will notify the trustee of any tax due within 180 days from receipt of the application, or within any additional time as permitted by the bankruptcy court.