Internal Revenue Code · 26 U.S.C.

§ 6603. Deposits made to suspend running of interest on potential underpayments, etc.

In force Text current through Public Law 119-121 (October 9, 2026) release point 119-121

Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).

Cite as 26 U.S.C. § 6603

At a glance

Read from the text, the source credit and the official notes. Not part of the law.

Status: In force
Added: October 22, 2004 by Pub. L. 108–357
Last amended: July 1, 2019 by Pub. L. 116–25
Amendments: 1 dated changes in the source credit
Length: 5 subsections · 510 words · about 2 min to read
Defines: 3 terms
Cross-references: cites 3; cited by 1 Code section and 0 other regulations

¶(a) Authority to make deposits other than as payment of tax

A taxpayer may make a cash deposit with the Secretary which may be used by the Secretary to pay any tax imposed under subtitle A or B or chapter 41, 42, 43, or 44 which has not been assessed at the time of the deposit. Such a deposit shall be made in such manner as the Secretary shall prescribe.

¶(b) No interest imposed

To the extent that such deposit is used by the Secretary to pay tax, for purposes of section 6601 (relating to interest on underpayments), the tax shall be treated as paid when the deposit is made.

¶(c) Return of deposit

Except in a case where the Secretary determines that collection of tax is in jeopardy, the Secretary shall return to the taxpayer any amount of the deposit (to the extent not used for a payment of tax) which the taxpayer requests in writing.

¶(d) Payment of interest

¶(1) In general

For purposes of section 6611 (relating to interest on overpayments), except as provided in paragraph (4), a deposit which is returned to a taxpayer shall be treated as a payment of tax for any period to the extent (and only to the extent) attributable to a disputable tax for such period. Under regulations prescribed by the Secretary, rules similar to the rules of section 6611(b)(2) shall apply.

¶(2) Disputable tax

¶(A) In general

For purposes of this section, the term “disputable tax” means the amount of tax specified at the time of the deposit as the taxpayer’s reasonable estimate of the maximum amount of any tax attributable to disputable items.

¶(B) Safe harbor based on 30-day letter

In the case of a taxpayer who has been issued a 30-day letter, the maximum amount of tax under subparagraph (A) shall not be less than the amount of the proposed deficiency specified in such letter.

¶(3) Other definitions For purposes of paragraph (2)—

¶(A) Disputable item The term “disputable item” means any item of income, gain, loss, deduction, or credit if the taxpayer—

¶(i) has a reasonable basis for its treatment of such item, and

¶(ii) reasonably believes that the Secretary also has a reasonable basis for disallowing the taxpayer’s treatment of such item.

¶(B) 30-day letter

The term “30-day letter” means the first letter of proposed deficiency which allows the taxpayer an opportunity for administrative review in the Internal Revenue Service Independent Office of Appeals.

¶(4) Rate of interest

The rate of interest under this subsection shall be the Federal short-term rate determined under section 6621(b), compounded daily.

¶(e) Use of deposits

¶(1) Payment of tax

Except as otherwise provided by the taxpayer, deposits shall be treated as used for the payment of tax in the order deposited.

¶(2) Returns of deposits

Deposits shall be treated as returned to the taxpayer on a last-in, first-out basis.

(Added Pub. L. 108–357, title VIII, § 842(a), Oct. 22, 2004, 118 Stat. 1598; amended Pub. L. 116–25, title I, § 1001(b)(1)(D), July 1, 2019, 133 Stat. 985.)

Terms defined here

Where the text says “the term … means”. Select a term to jump to its definition.

30-day letter § 6603(d)(3)(B)
disputable item § 6603(d)(3)(A)
disputable tax § 6603(d)(2)(A)

Cross-references

Computed from the citations in the text of Title 26 and 26 CFR.

This section cites 3 other sections

Cited by 1 Code section

§ 6233(c) Interest and penalties

Amendment history

From the source credit and the official notes, newest first.

July 1, 2019Amended by Pub. L. 116–25Parts changed in 2019: (d)(3)(B)
October 22, 2004Added by Pub. L. 108–357

Where it sits in the Code

Nearby sections

§ 6601 Interest on underpayment, nonpayment, or extensions of time for payment, of tax
§ 6602 Interest on erroneous refund recoverable by suit
§ 6603 Deposits made to suspend running of interest on potential underpayments, etc.

Official notes

Show the Law Revision Counsel's notes (amendments, effective dates)

Editorial Notes

Amendments

2019—Subsec. (d)(3)(B). Pub. L. 116–25 substituted “Internal Revenue Service Independent Office of Appeals” for “Internal Revenue Service Office of Appeals”.

Effective Date

Pub. L. 108–357, title VIII, § 842(c), Oct. 22, 2004, 118 Stat. 1599, provided that:

“(1) In general.— The amendments made by this section [enacting this section] shall apply to deposits made after the date of the enactment of this Act [Oct. 22, 2004].

“(2) Coordination with deposits made under revenue procedure 84–58.— In the case of an amount held by the Secretary of the Treasury or his delegate on the date of the enactment of this Act as a deposit in the nature of a cash bond deposit pursuant to Revenue Procedure 84–58, the date that the taxpayer identifies such amount as a deposit made pursuant to section 6603 of the Internal Revenue Code (as added by this Act) shall be treated as the date such amount is deposited for purposes of such section 6603.”