What Is 26 USC 6203: Method of Assessment?
Understand the procedural requirements of 26 USC 6203, the federal statute that dictates how the IRS must formally record a tax liability before collection.
The federal tax statute 26 USC 6203 provides the official method the Internal Revenue Service (IRS) must use to record a taxpayer’s liability. This formal recording, known as an “assessment,” is a legally mandated step that must occur before the IRS can take any collection action, such as a levy or lien. This process creates the official legal record of a tax debt.
The assessment formally fixes the amount of tax owed as a matter of record. Without a valid assessment that meets the specific requirements of the law, the IRS lacks the legal authority to demand payment or seize assets. The statute also grants taxpayers the right to request a copy of this record.
The Formal Assessment Process
The assessment of a tax liability is a specific, internal administrative procedure performed by the IRS. It is not a single document sent to a taxpayer but rather the formal act of recording the debt on the government’s books. This action is carried out by a designated IRS employee known as an “assessment officer.”
The main event in this process is the assessment officer’s signing of a summary record of assessment. Historically, this was done on a Form 23C, but the IRS now uses a computer-generated equivalent known as the RACS Report-006. The date the assessment officer signs this summary report is the official “date of the assessment,” which establishes the legal beginning of the tax debt and starts the statute of limitations for collection.
The signing of the summary record by the assessment officer is what makes the tax debt legally official. It is from this formal record that the IRS generates notices and demands for payment that are subsequently sent to the taxpayer.
Required Information for a Valid Assessment
For an assessment to be legally valid, Treasury Regulation § 301.6203-1 specifies that the record must contain four distinct pieces of information. The absence of this required information can be grounds to challenge the validity of the assessment itself.
First, the record must clearly identify the taxpayer. This is accomplished by including the taxpayer’s name and their unique taxpayer identification number, which is a Social Security Number (SSN) for individuals or an Employer Identification Number (EIN) for businesses.
Second, the assessment must state the character of the liability. This means the record must specify the type of tax being assessed. Examples include individual income tax, payroll taxes, or specific civil penalties, such as a penalty for failure to file.
The record must also include the taxable period involved. This identifies the specific timeframe for which the liability was incurred, such as the 2023 tax year for an income tax assessment or a specific quarter for employment taxes. Finally, the assessment must contain the precise amount of the liability being assessed, which represents the total tax, penalties, and interest determined to be due at the time the assessment is made.
Requesting a Copy of the Assessment Record
A taxpayer may need to verify that the IRS has made a valid assessment before collection activities begin. The right to request a copy of the assessment record is granted by federal law. Making such a request is a way to confirm the date of the assessment and verify that all legally required information was properly recorded.
When a taxpayer requests proof of assessment, the IRS is not required to provide the internal RACS Report-006 or the historical Form 23C. Instead, the agency provides an official, certified transcript that serves as legal evidence of the assessment. This document is Form 4340, “Certificate of Assessments, Payments, and Other Specified Matters.” This form is considered sufficient proof in legal proceedings that a valid assessment was made.
To obtain this form, a taxpayer can call the IRS or submit a written request. The Form 4340 provides all the pertinent information required by regulation and offers a clear summary of the taxpayer’s account for a specific tax period. This allows the taxpayer or their representative to confirm that the procedural requirements were met.