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Deposit Penalty Relief for Superfund Chemical Taxes

April 18, 2022

On April 15, 2022, the IRS issued Notice 2022-15 (“Notice”) to provide I.R.C. Sec. 6656 deposit penalty relief for Superfund chemical taxes reinstated, with certain modifications, by the Infrastructure Investment and Jobs Act (IIJA) from July 1, 2022.

The I.R.C. Sec. 6656 penalty relief is provided for the third and fourth calendar quarters of 2022, and the first calendar quarter of 2023 if:

(i) the taxpayer makes timely deposits of applicable Superfund chemical taxes, even if the deposit amounts are computed incorrectly, and

(ii) the amount of any underpayment of the applicable Superfund chemical taxes for each calendar quarter is paid in full by the due date for filing the Form 720 return for that quarter;

The Notice also provides that during the first, second, and third calendar quarters of 2023, the IRS will not withdraw the taxpayer's right to use the deposit safe harbor rules of Treas. Reg. Sec. 40.6302(c)-1(b)(2) for failure to make required deposits of Superfund chemical taxes if the above requirements are met.

The Notice has been issued in response to taxpayers’ comments to address the short time frame between the reinstatement of the Superfund chemical taxes and the due date of the first deposit, the unavailability of the Treas. Reg. Sec. 40.6302(c)-1(b)(2) deposit safe harbor rules in 2022, the possible difficulties of computing the correct amount of tax during the third calendar quarter of 2022 (which is both the first calendar quarter the taxes are in effect and the look-back quarter for the first calendar quarter of 2023), and the number of new taxpayers owing Superfund chemical taxes that have not previously had to comply with the deposit requirements of I.R.C. Sec. 6302. In consideration of these issues, the Treasury Department and the IRS have determined that it is in the interest of sound tax administration to provide relief regarding the I.R.C. Sec. 6656 penalty with respect to deposits of Superfund chemical taxes for the last two calendar quarters of 2022, and the first calendar quarter of 2023.

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Irina Pisareva
Partner – New York
Phone: +1.212.803.4067
Email: ipisareva@crowell.com
David B. Blair
Partner – Washington, D.C.
Phone: +1.202.624.2765
Email: dblair@crowell.com