[Code of Federal Regulations]
[Title 26, Volume 18]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6201-1]

[Page 154-155]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
                               Assessment
 
Sec. 301.6201-1  Assessment authority.

                               In General


    (a) In general. The district director is authorized and required to 
make all inquiries necessary to the determination and assessment of all 
taxes imposed by the Internal Revenue Code of 1954 or any prior internal 
revenue law. The district director is further authorized and required, 
and the director of the regional service center is authorized, to make 
the determinations and the assessments of such taxes. However, certain 
inquiries and determinations are, by direction of the Commissioner, made 
by other officials, such as assistant regional commissioners. The term 
``taxes'' includes interest, additional amounts, additions to the taxes, 
and assessable penalties. The authority of the district director and the 
director of the regional service center to make assessments includes the 
following:
    (1) Taxes shown on return. The district director or the director of 
the regional service center shall assess all taxes determined by the 
taxpayer or by the district director or the director of the regional 
service center and disclosed on a return or list.
    (2) Unpaid taxes payable by stamp. (i) If without the use of the 
proper stamp:
    (a) Any article upon which a tax is required to be paid by means of 
a stamp is sold or removed for sale or use by the manufacturer thereof, 
or
    (b) Any transaction or act upon which a tax is required to be paid 
by means of a stamp occurs;

The district director, upon such information as he can obtain, must 
estimate the amount of the tax which has not been paid and the district 
director or the director of the regional service center must make 
assessment therefor upon the person the district director determines to 
be liable for the tax. However, the district director or the director of 
the regional service center may not assess any tax which is payable by 
stamp unless the taxpayer fails to pay such tax at the time and in the 
manner provided by law or regulations.
    (ii) If a taxpayer gives a check or money order as a payment for 
stamps but the check or money order is not

[[Page 155]]

paid upon presentment, then the district director or the director of the 
regional service center shall assess the amount of the check or money 
order against the taxpayer as if it were a tax due at the time the check 
or money order was received by the district director.
    (3) Erroneous income tax prepayment credits. If the amount of income 
tax withheld or the amount of estimated income tax paid is overstated by 
a taxpayer on a return or on a claim for refund, the amount so 
overstated which is allowed against the tax shown on the return or which 
is allowed as a credit or refund shall be assessed by the district 
director or the director of the regional service center in the same 
manner as in the case of a mathematical error on the return. See section 
6213 (b)(1), relating to exceptions to restrictions on assessment.
    (b) Estimated income tax. Neither the district director nor the 
director of the regional service center shall assess any amount of 
estimated income tax required to be paid under section 6153 or 6154 
which is unpaid.
    (c) Compensation of child. Any income tax assessed against a child, 
to the extent of the amount attributable to income included in the gross 
income of the child solely by reason of section 73(a) or the 
corresponding provision of prior law, if not paid by the child, shall, 
for the purposes of the income tax imposed by chapter 1 of the Code (or 
the corresponding provisions of prior law), be considered as having also 
been properly assessed against the parent. In any case in which the 
earnings of the child are included in the gross income of the child 
solely by reason of section 73(a) or the corresponding provision of 
prior law, the parent's liability is an amount equal to the amount by 
which the tax assessed against the child (and not paid by him) has been 
increased by reason of the inclusion of such earnings in the gross 
income of the child. Thus, if for the calendar year 1954 the child has 
income of $1,000 from investments and of $3,000 for services rendered, 
and the latter amount is includible in the gross income of the child 
under section 73(a) and the child has no wife or dependents, the tax 
liability determined under section 3 is $625. If the child had only the 
investment income of $1,000, his tax liability would be $62. If the tax 
of $625 is assessed against the child, the difference between $625 and 
$62, or $563, is the amount of such tax which is considered to have been 
properly assessed against the parent, if not paid by the child.