Domestic Company Cannot Pay The Transition Tax In Installments

A domestic corporation cannot pay its transition tax liabilities in installments because it had a tax deficiency due to negligence or intentional disregard of federal regulations, the Internal Revenue Service Office of Chief Counsel said on Friday, September 2, 2022.

The IRS said in Chief Counsel Memorandum 202235009 that the corporation, which was not named, was not entitled to elect to pay the transition tax in installments because the company's return did not reflect the final transition tax regulations, resulting in a deficiency assessed by the IRS. 

The Corporation Did Not Report A Portion Of Its Income, According To The Memo, Because It Is Challenging A Provision Of The Rules That Would Increase Its Net Tax Liability.

However, the resulting deficiency determined by the IRS amounted to a "deficiency due to negligence or intentional disregard" of the regulations, which barred it from making the election to pay the tax liability in installments, the memo said.

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