T.C. Memo. 1998-74
UNITED STATES TAX COURT
CRAIG M. AND REBECCA MAXWELL, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 17052-96. Filed February 23, 1998.
Craig M. Maxwell and Rebecca Maxwell, pro sese.
Edwin A. Herrera and Ian Russell, for respondent.
MEMORANDUM OPINION
LARO, Judge: Craig M. and Rebecca Maxwell petitioned the
Court to redetermine respondent's determination of the following
deficiencies in their 1990 through 1993 Federal income taxes and
additions thereto:
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Craig M. Maxwell
Additions to Tax
Sec. Sec.
Year Deficiency 6651(a)(1) 6654
1990 $280,484 $42,621 $18,422
1991 2,571 643 149
1992 68,868 17,205 3,003
1993 70,431 17,153 2,869
Rebecca Maxwell
Additions to Tax
Sec. Sec.
Year Deficiency 6651(a)(1) 6654
1990 $137,827 $34,457 $9,074
1991 904 226 54
1992 32,725 8,181 1,427
1993 29,976 7,494 1,255
Following respondent's concessions we must decide whether
petitioners are entitled to refunds of overpayments for their
1990, 1992, and 1993 taxable years. We hold they are not.
Section references are to the Internal Revenue Code in effect for
the years in issue. Rule references are to the Tax Court Rules
of Practice and Procedure.
Background
All facts have been stipulated and are so found. The
stipulated facts and the exhibits submitted therewith are
incorporated herein by this reference. Petitioners resided in
Riverside, California, when they petitioned the Court.
Petitioners delinquently filed Federal income tax returns
for each of the subject years. Respondent received petitioners'
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1990 through 1992 Federal income tax returns on September 3,
1997, and respondent received petitioners' 1993 return 1 day
later. On May 6, 1996, the Commissioner had issued each
petitioner two notices of deficiency, one for 1990 and 1991, and
the other for 1992 and 1993. Before doing so, the Commissioner
had prepared "returns" for each petitioner for each year in issue
under the authority of section 6020(b).
For each subject year, petitioners' income tax liability,
tax payments, and overpayments are as follows:
1990 1991 1992 1993
Tax Liability $169,829 $0 $0 $0
Tax Payments
Oct. 17, 1990 3,390 ---
Feb. 3, 1991 9,000 ---
Apr. 15, 1991 207,610 ---
Apr. 15, 1993 --- --- 100 ---
Apr. 15, 1994 --- --- --- 3,641
Total 220,000 0 100 3,641
Overpayment 50,171 0 100 3,641
Discussion
Respondent argues that petitioners are not entitled to a
refund of any of the overpayments because the disputed amounts
paid for each year were paid by petitioners more than 2 years
before the issuance of the notice of deficiency. Petitioners
argue that they are entitled to a refund for 1990 because they
filed their 1990 Federal income tax return in 1997, a time that
is within 3 years of the time that the petition was filed
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herein.1 Petitioners argue that section 6512(b) and Commissioner
v. Lundy, 516 U.S. 235 (1996), have no bearing here because the
Commissioner agrees that petitioners are entitled to a refund for
1990.
We agree with respondent. Petitioners must demonstrate that
their claim for refund was timely. Flagg v. Commissioner,
T.C. Memo. 1997-297. Although section 6512(b)(1) bestows
jurisdiction on this Court to determine the existence and amount
of any overpayment of tax to be refunded for a year before us,
section 6512(b)(3)(B) prohibits the Court from awarding a refund
unless we determine that the refunded amount was paid
within the period which would be applicable under
section 6511(b)(2) * * * or (d), if on the date of the
mailing of the notice of deficiency a claim had been
filed (whether or not filed) stating the grounds upon
which the Tax Court finds that there is an overpayment
* * *
See also Commissioner v. Lundy, supra at 241-242.2 The relevant
provision of section 6511(b)(2) provides that when a claim for
refund is not filed within the 3-year period of section 6511(a),
the amount of the refund may not exceed the amount of tax paid
1
Petitioners' brief does not address any of the other years
in issue.
2
Contrary to petitioners' argument, this case is controlled
by the Commissioner v. Lundy, 516 U.S. 235 (1996) case. Although
sec. 1282(a) of the Taxpayer Relief Act of 1997, Pub. L. 105-34,
111 Stat. 788, 1037, recently amended sec. 6512(b)(3) in
response to the result in Lundy case, this amendment is
inapplicable to the instant proceeding because the amendment is
effective with claims for credit or refund for taxable years
ending after Aug. 5, 1997.
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within the 2 years preceding the claim for refund. Sec.
6511(b)(2)(B). Section 6511(a) states that a claim for refund
generally must be made within 3 years from the time the return
was filed or if no return was filed by the taxpayer, within 2
years from the time the tax was paid.
We apply the established law on the refund of overpayments
to the stipulated amounts shown in the chart above. The withheld
amounts were deemed withheld on April 15 of the filing years,
sec. 6513(a) and (b)(1), and, when respondent issued petitioners
the notices of deficiency, petitioners had not yet filed their
returns. Thus, petitioners are limited to a refund of only the
amounts that they paid during the 2-year period prior to the time
that the notices of deficiency were issued. Commissioner v.
Lundy, supra. Because petitioners paid none of the disputed
amounts within this 2-year period, we hold that they are not
entitled to a refund of any of these amounts.
In reaching our holdings herein, we have considered all
arguments made by petitioners for contrary holdings and, to the
extent not discussed above, find them to be irrelevant or without
merit.
To reflect the foregoing,
Decision will be entered
stating that there is no
deficiency or additions to tax
for any of the subject years.