Letter 105-C / 106-C: Campus claim disallowance in full (105-C) or in part (106-C)

What Letter 105-C / 106-C is

The campus versions of a claim disallowance, issued when a claim for refund is worked by a campus rather than a field examiner. The manual identifies them on the transcript as Letter 105-C or 106-C with a TC 290 or TC 291 carrying reason code 80 (disallowed in full), 81 (disallowed in part) or 82 (allowed) (IRM 4.10.11.2.4(3), Sept. 4, 2020). IRC 6402(l) requires a stated reason for any disallowance (IRM 4.10.11.2.3(4)); the manual's stock text for an unanswered request is "We are disallowing your claim in full because we did not receive a response to our request for supporting information."

The deadline

The two-year period to file suit under IRC 6532 runs from a certified notice of disallowance and "is not suspended" during reconsideration or Appeals (IRM 4.10.11.2.16(4)).

What to do

Read the reason. If the claim was disallowed for lack of documents, a reconsideration request with the documents is possible but must finish inside the two years (IRM 4.10.11.2.16.1.1(3)). If the disallowance was on the merits, follow the appeal instructions printed on the letter, and calendar the two-year date; the manual does not reproduce the letter's text, so rely on what your copy says.

The campus disallowance and the two-year clock

Most claims for refund are decided at a campus rather than by an examiner, and when the campus decides against the taxpayer it sends Letter 105-C (disallowed in full) or 106-C (disallowed in part). These are the certified notices of disallowance the law requires before a taxpayer can sue, and so, unlike the examiner's preliminary letters, they start the two-year period under IRC 6532 for filing a refund suit. The letter must state a reason. The common ones are that the supporting information requested was never received, that the claim was filed outside the refund statute of limitations (generally three years from the return or two from the payment), that the law does not allow the relief requested, or that the facts did not establish reasonable cause. The reason determines the response, and the two-year date goes in the calendar whatever the reason is.

Responding by the reason

If the disallowance was for missing information, a reconsideration request enclosing the documents is the quickest route and is often granted; it must be completed inside the two years, and Letter 917 is the reply you will get. If it was on the merits, the letter carries appeal instructions: a written protest to the IRS Independent Office of Appeals within the time stated, with the facts and the law, and Appeals can consider reasonable cause afresh. If it was for a statute problem, check the dates yourself, because a claim mailed on time and received late is timely under the mailbox rule and a Form 945-X treated as filed on the wrong date is a recurring error. In every case, if the two-year date approaches with the matter unresolved, either obtain a signed Form 907 extension or file suit to preserve the claim. For a penalty that was removed in part (106-C), the allowed part refunds on its own; pursue only the disallowed part. The claim versus abatement page covers the route from here, and the relief order guide covers which grounds to raise first when more than one applies.

Questions about Letter 105-C / 106-C

Have a different notice? The IRS notice decoder lists all 77 in the order they tend to arrive.