Opinion ID: 4528264
Heading Depth: 3
Heading Rank: 2

Heading: the 2004, 2005, and 2006 tax years

Text: GMI timely filed its corporate income tax returns for the 2004, 2005, and 2006 tax years. The Partnership timely filed its partnership income tax returns for those years as well. In September 2007, the IRS began auditing GMI’s 2004–2006 corporate tax returns. In November 2007, the IRS notified the Partnership that it would initiate a TEFRA proceeding with respect to the Partnership’s 2004–2006 tax returns. On April 29, 2009, the IRS sent a 30-day letter to GMI showing the results of the corporate tax audit for 2004– 2006 and enclosing an “examination report showing proposed changes to [GMI’s] tax[es].” J.A. 345. The 30-day letter identified tax deficiencies of more than $30 million for 2004, $347 million for 2005, and $58 million for 2006. J.A. 347. As was the case with the 30-day letter relating to 2002–2003, the letter for 2004–2006 informed GMI of the enhanced interest rate imposed on large corporate underpayments and advised GMI that “pay[ing] the full amount due now . . . will limit the amount of interest and penalties.” J.A. 347. As for the TEFRA partnership proceeding, in November 2010, the partners entered into settlement agreements with the IRS, as reflected in executed Form 870-LT(AD). The settlement agreement Form 870-LT(AD) contemplated an assessment of “any interest provided by law.” J.A. 380– 81, 388–89, 398–99, 408–09, 418–19, 428–29, 438–39, 448– 49, 458–59, 468–69. The Partnership settlement agreements resulted in TEFRA adjustments to certain partnership items that increased GMI’s corporate tax liabilities for the 2004–2006 tax years. apply. There, the applicable date is thirty days after the IRS “notifies the taxpayer of the assessment or proposed assessment of the tax.” § 6621(c)(2)(B)(i). Case: 19-1124 Document: 42 Page: 12 Filed: 04/23/2020 12 GENERAL MILLS, INC. v. UNITED STATES On March 4, 2011, the IRS sent GMI a second 30-day letter along with multiple computational documents showing the impact of the TEFRA adjustments on GMI’s corporate tax liabilities for 2004–2006. J.A. 478–558. The second 30-day letter also enclosed a Form 870, “Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment,” which GMI’s representative later signed. The executed Form 870 stated that GMI “consent[s] to the immediate assessment and collection of any deficiencies (increase in tax and penalties) . . . shown [herein], plus any interest provided by law.” J.A. 480. The computational documents showed that the IRS computed underpayments in tax for GMI’s 2004, 2005, and 2006 tax years of, respectively, more than $19 million, more than $9 million, and about $52 million. J.A. 480, 483. As with the earlier 30-day letters, the letter informed GMI that the IRS would impose an enhanced interest rate on large corporate underpayments. J.A. 478. On April 11, 2011, GMI paid these amounts together with designated interest, including LCU interest. J.A. 207, 217, 226. Thereafter, on June 14, 2011, the IRS provided GMI with the interest computation schedules that it had used to compute the amount of interest due, including the amount of LCU interest due, on GMI’s tax underpayments for 2004–2006. J.A. 559–63. The interest computation schedules informed GMI that the IRS had applied an applicable date of May 29, 2009 for beginning the accrual of LCU interest. May 29, 2009 was the thirtieth day after the IRS issued the first 30-day letter on April 29, 2009. See § 6621(c)(2). As with the 2002–2003 tax years, GMI claims the IRS used the incorrect applicable date to compute the amount of LCU interest due for the 2004–2006 tax years. GMI argues that the correct applicable date should have been April 3, 2011, i.e., the thirtieth day after the second 30-day letter dated March 4, 2011 and additional computational documents showing the impact of the Partnership Case: 19-1124 Document: 42 Page: 13 Filed: 04/23/2020 GENERAL MILLS, INC. v. UNITED STATES 13 settlement agreements. As with GMI’s claims relating to the 2002–2003 tax years, GMI believes the IRS erroneously applied § 6621(c)(2)(A), when it should have applied § 6621(c)(2)(B)(i), to determine the applicable date.