After the Department approves an offer or a concession that calls for a payment to the taxpayer, the Tax Division will authorize the IRS to schedule an overpayment in the appropriate amount, plus statutory interest. The Tax Division’s post-litigation function will coordinate the issuance of the refund check and/or notice of credit as well as the dismissal of the suit or the filing of a satisfaction of judgment. The IRS usually requires about 60 days to issue the refund after the amount of the refund has been computed.

In cases that the United States Attorney’s Office has handled, the Tax Division will normally send the refund check and/or notice of credit due under a compromise to the taxpayer or taxpayer’s counsel only after receiving a signed stipulation of dismissal or satisfaction of judgment executed by the taxpayer or taxpayer’s counsel. If a signed stipulation of dismissal or satisfaction of judgment has not been received, the Tax Division will forward the refund check and/or notice of credit to the United States Attorney’s Office, which should deliver these to the taxpayer or taxpayer’s counsel of record only after receiving the signed stipulation or satisfaction of judgment.

When appropriate, the Tax Division will also forward a separate check for costs, fees, and expenses payable from the judgment fund. 31 U.S.C. § 1304. If the United States Attorney’s Office or the taxpayer disagrees with the amount of a check, the Tax Division should be advised immediately. Acceptance of the refund check does not prejudice the taxpayer’s right to claim any additional amount. See 26 U.S.C. § 6611(b)(2).

When handling a settlement that involves only litigation costs or attorneys’ fees, the United States Attorney’s Office must request payment either from the Judgment Fund under 31 U.S.C. § 3104 or from the IRS, as appropriate. Compare 26 U.S.C. § 7430(d)(1) with 28 U.S.C. § 2412(d)(4).

[updated April 2018]